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Date: 29 March 2023 Author: Grzegorz Kuczyński
IMF Approves Loan Package for Ukraine
The International Monetary Fund said its executive board had approved a four-year $15.6 billion loan program for Ukraine, the IMF said in a statement on March 21. The loan is the first major conventional financing program approved by the IMF for a country involved in a large-scale war.
The goal of Ukraine’s new IMF-supported program is to provide an anchor for economic policies and support the country’s recovery after the war. “The goal of this program is to support Ukraine’s recovery on the path toward EU accession in the post-war period,” the IMF said in a statement. The IMF said the agreement was expected to help unleash large-scale financing for Ukraine from international donors and partners. Typically IMF loans unlock support from the World Bank and other lenders. The two-step program will first look to stabilize the country’s economic situation and then underpin Ukraine’s reform efforts to sustain its economy and integration with the European Union. The IMF will first provide Ukraine with a $4.5 billion relief by the end of this year. Ukrainian Prime Minister Denys Shmyhal hailed the agreement and thanked the IMF for its support. “In conditions of a record budget deficit, this program will help us finance all critical expenditure and ensure macroeconomic stability and strengthen our interaction with other international partners,” he said in a statement. U.S. Treasury Secretary Janet Yellen, who paid a surprise visit to Kyiv last month to reaffirm U.S. support for Ukraine, also welcomed the deal. The fund last week changed a rule to allow new loan programs for countries facing “exceptionally high uncertainty,” without naming Ukraine. If approved, as expected, the Ukraine program would be the IMF’s biggest loan to a country involved in an active conflict.
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