23 October 2016

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Ukraine expects IMF approval of loan tranche - Finance Minister

Ukraine's Finance Minister Oleksandr Danylyuk said Monday the country expects a positive outcome of a voting of the International Monetary Fund’s Executive Directors scheduled for September 14 that is to decide on the disbursement of the third loan tranche to Ukraine in the near future.


Danylyuk also commented on Russian Finance Minister Anton Siluanov's statement that Russia would vote against the provision of bailout funds to Ukraine as Kyiv had allegedly not fulfilled all the requirements for the receipt of such funds. Danylyuk noted that the IMF would make its decision concerning Ukraine by a majority of votes cast.

"At previous votings, Russia has never supported the IMF decision on the allocation of a loan tranche to Ukraine under the current Extended Fund Facility (EFF) program. Nevertheless, the IMF has twice made decisions in favor of Ukraine, which has already received two tranches under the IMF program," Danylyuk said.

Russia to vote against IMF loan disbursement to UkraineAs UNIAN reported earlier, the IMF is expected to consider Ukraine issue on September 14. It will consider Ukraine's implementation of the cooperation program and decide on the allocation of the next loan tranche to Ukraine.

The IMF approved the EFF program for Ukraine, worth $17.5 billion, in March 2015, for a four-year period.

Poroshenko: IMF to consider third tranche for Ukraine on Sept 14Last year, Ukraine received two tranches of $5 billion and $1.7 billion, respectively.

In autumn 2015, while Kyiv was awaiting the EFF's second review for the disbursement of the third tranche, worth $1.7 billion, the situation in Ukraine was complicated by local elections in October 2015 and, later, by serious political debates regarding tax reforms and the 2016 budget. Cooperation with the IMF was then frozen.

But talks with the IMF resumed only late in April 2016, following the formation of a new Ukrainian government headed by former parliament speaker Volodymyr Groysman.

The two sides returned for a second review of the cooperation program in summer and, according to Ukrainian authorities, agreed on all matters in the Memorandum of Cooperation, which included assessments of the reforms and tasks for the future.

The memorandum was expected to be signed early in July, while the IMF's Executive Board was to consider the Ukraine issue later that month, in a bid to pave the way for distributing the third tranche.

Its volume was also under discussion, ranging between $1 billion and $1.7 billion.

However, the document has not been signed, and the Ukraine issue has not yet been considered.

In late August, the Ukrainian finance minister said in an interview with Reuters that Ukraine was "very close" to obtaining the third tranche from the IMF.

He noted that the country was not experiencing an acute need for IMF financing, but the IMF loan would unlock other financial support for Ukraine.

In particular, Ukraine could receive $1 billion for its budget, which would be guaranteed by the United States, along with EUR 600 million of macro-financial assistance from the European Union and a $500 million loan from the World Bank to purchase gas during the heating season.

On September 1, IMF spokesperson Gerry Rice said that the Executive Board would meet in the second half of September to consider Ukraine's disbursement.

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