The IMF and Ukraine have reached a new financial agreement
2022.11.23 10:15
The IMF and Ukraine have reached a new financial agreement
Budrigannews.com – On Wednesday, the International Monetary Fund announced that it had reached a staff-level agreement with Ukraine for a policy program monitoring arrangement. This agreement aims to open the way for a brand-new, fully functional IMF loan program for Kyiv.
The Program Monitoring with Board Involvement (PMB) arrangement, according to the International Monetary Fund (IMF), “will help provide an anchor for macroeconomic policies and catalyze donor support.” However, executive board approval is required in the upcoming weeks.
Ukraine requested a new IMF loan program in the range of $15 billion to $20 billion earlier this year. However, the Fund’s debt sustainability requirements have so far prevented the country from receiving a program of that size as it fights Russia’s invasion and endures frequent missile attacks on its energy infrastructure.
Instead, the IMF approved $1.3 billion in emergency financing under a new facility at the beginning of October to deal with food shortages and price increases brought on by the war in Ukraine.
In parallel, the Fund initiated discussions with Kiev regarding economic policies that may serve as the foundation for a larger loan program. These discussions culminated in a virtual mission that ran from November 11 to 22.
The staff-level PMB agreement, according to the IMF, requires Ukraine to implement policies and measures to increase tax revenues, revive the domestic bond market, and contain monetary financing in order to limit inflation.The Fund also stated that the PMB is anticipated to improve governance and transparency as well as contribute to the financial sector’s long-term stability.
