On April 3, the Board of Directors of the International Monetary Fund has finalized the third review of Ukraine’s economic program under the Extended Fund Facility (EFF) and has adopted a decision to grant USD 1 billion loan to Ukraine.
What is the core of the subject?
After joint activities at the beginning of the March Ukraine and the International Monetary Fund have reached a working agreement on the content of the Memorandum on Economic and Financial Policy.
This is a crucial step towards finalizing the third review of the IMF Extended Funding Facility and granting the next tranche to Ukraine equal to USD 1 billion which shall be used to increase the reserves of the National Bank of Ukraine.
The new Memorandum contains the description of the policy and strategy which Ukraine is going to stick to in the next EFF period in 2017 and 2018 and is aimed to ensure the economic growth of Ukraine through the implementation of structural reforms and to create pre-conditions for independent economic development.
What is the benefit?
The allocation of the next tranche means that both sides are committed to fulfill the obligations and moreover that International Monetary Fund assesses progress of Ukraine in pursuing reforms. Increase in National Bank of Ukraine reserves will positively affect the stability of the national currency.The vote of confidence of the IMF is one of essential prerequisites for attraction of world investors to Ukraine. Continuation of cooperation between Ukraine and the International Monetary Fund within the framework of Extended Fund Facility confirms Ukraine's commitment to implement further structural reforms aimed to ensure sustainable development.