International Finance Aid for Ukraine: IMF approves USD 1 billion disbursement for Ukraine
Business10:18 Sep. 15, 2016

IMF approves USD 1 billion disbursement for Ukraine

Kyiv is set to receive long-awaited third tranche of international bailout

The International Monetary Fund's Executive Board has approved a third disbursement to Ukraine under the Extended Fund Facility (EFF) program, Ukrainian President Petro Poroshenko has announced in the early hours of Thursday, September 15.

"The Fund's decision paves the way to the U.S. financial aid worth USD 1 billion and macro-financial assistance worth an additional sum of EUR 600 million from the European Union, other international financial organizations," the president said in his video address posted on Facebook.

He added that a Russian attempt to undermine the IMF's decision had failed, and that the funds' release would help keep the hryvnia currency stable and aid the economy.

As the IMF reported, the amount of the third tranche is SDR 716.11 million, which is USD 1 billion. It would bring total disbursements to about USD 7.62 billion.

The latest disbursement is less than the roughly USD 1.7 billion anticipated, after some reforms required by the fund had stalled. However, Ukraine's president sounded optimistic note:

"The positive decision by the IMF is evidence that the world recognises that reforms are happening in Ukraine, that real and positive changes are happening in Ukraine, and that the country is moving in the right direction," Poroshenko said.

IMF Managing Director Christine Lagarde said in a statement after the board's vote that Ukraine was showing signs of recovery: 

"Ukraine is showing welcome signs of recovery, notwithstanding a difficult external environment and a severe economic crisis. Activity is picking up, inflation has receded quickly, and confidence is improving. Gross international reserves and bank deposits have risen. While the social and economic cost of the crisis has been high, growth is expected to be higher in the period ahead," Lagarde said.

"This progress owes much to the authorities' program implementation, including sound macroeconomic policies, bold steps to bring energy tariffs to cost-recovery levels, and measures to rehabilitate the banking system. Determined policy implementation, however, remains critical to achieve program objectives, given the significant challenges ahead," she added.

Based on reporting by UNIAN, Reuters

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