Ukraine risks losing IMF support over stalled reforms – Lagarde

"I am concerned about Ukraine's slow progress in improving governance and fighting corruption, and reducing the influence of vested interests in policymaking," Lagarde said.

"Without a substantial new effort to invigorate governance reforms and fight corruption, it is hard to see how the IMF-supported program can continue and be successful," she said. 

As reported earlier, the IMF on March 11 approved a four-year EFF worth $17.5 billion for Ukraine. The first tranche worth $5 billion under this program arrived in Ukraine on March 13. The second tranche worth $1.7 billion was transferred to Ukraine on August 4.

The second program review was conducted in two stages. The IMF mission was operating in Kyiv in September, and on October 2 the talks were suspended due to the local elections in the country, as well as ongoing discussions of the tax reform and the draft state budget for 2016. In November, negotiations between Ukraine and the IMF resumed.

At present, Ukraine and the IMF are agreeing a report on the progress of reforms implementation and the Memorandum on the second program review, while identifying further actions. It is noted that the two sides are discussing a wide range of issues within the framework of the second program review, which includes various aspects of monetary, banking and anti-corruption policies, the pension reform and the privatization process.

The IMF Executive Directors will later make a decision on the disbursement of the third tranche to the tune of $1.7 billion. Ukraine hopes to receive the loan funds, which will unlock additional $2.3 billion in financial aid from Ukraine's creditors and $1 billion loan guarantee of the U.S. government.

At a meeting with Ukrainian President Petro Poroshenko on January 21, IMF Managing Director Christine Lagarde expressed hope for a positive decision of the IMF Executive Directors on granting the next tranche for Ukraine.