IMF Bailout: Finance minister assures Ukraine 'very close' to getting next IMF tranche

10:38 Aug. 31, 2016

Finance minister assures Ukraine 'very close' to getting next IMF tranche

Ukraine's Finance Minister Oleksandr Danylyuk (UNIAN photo)

Ukraine is absent from IMF Executive Board calendar of upcoming meetings

The International Monetary Fund (IMF) is very close to releasing a tranche of aid that would unlock around USD 2 billion in extra money, Finance Minister Oleksandr Danylyuk said on Tuesday, according to Reuters.

A USD 17.5 billion bailout program has helped Ukraine pull itself out of two years of economic recession caused by a separatist conflict in its industrial east. But a third tranche has been delayed since last October due to political upheaval and patchy reform progress.

"We are very close and that's important for us because it's an important signal for the markets, for investors and it unlocks other financial support," Danylyuk told Reuters in an interview in Berlin where he was due to meet his German counterpart Wolfgang Schaeuble.

Read also Loan provision to Ukraine is not on IMF's agenda yet

Danylyuk declined to be more specific on the timing of the tranche, originally envisaged worth USD 1.7 billion but now expected to be around USD 1 billion. But he said that once the IMF had released it, the Ukraine would receive USD 1 billion for the budget which would be guaranteed by the United States.

In addition, there would be other financial assistance of 600 million euros and some loans for purchasing gas.

Asked about what the effect would be if the IMF did not release the tranche, Danylyuk said he was not worried.

"We would have some payments which are due, which we could pay. We have no problems with that at the moment. The most important issue is that ... we need a decision of the board that our cooperation continues and that we are working as partners to implement reforms which are important for Ukraine."

Danylyuk said the Ukraine government was committed to implementing a wide-ranging reform agenda. First, an energy reform must be completed, including the full market liberalisation of the gas sector from April followed by a market reform of the electricity market.

Other priorities include overhauls in Ukraine's health and education systems, as well as a budget reform.


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