Denys Shmyhal / Photo from UNIAN
The loan is divided into two tranches, EUR 600 million each.
Ukrainian Prime Minister Denys Shmyhal says a EUR 1.2 billion disbursement for Ukraine provided by the European Commission under a macro-financial assistance (MFA) program will not affect the rate of the hryvnia, Ukraine's national currency, against the U.S. dollar in any way.
Stability
"The allocation of macro-financial assistance, based on the memorandum signed today, will not affect the rate of [the hryvnia against] the U.S. dollar in any way. The situation remains stable," the prime minister said during a working visit to Brussels on July 23.
Loan divided into tranches
According to Shmyhal, the loan is divided into two tranches of EUR 600 million each. The first disbursement is unconditional. It will be provided after the ratification of the memorandum by the Verkhovna Rada, Ukraine's parliament.
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The second one will be allocated after the implementation of reforms that the government plans to complete this year or in early 2021.
Use of funds
Funds of the macro-financial assistance will be channeled into the national budget to help Ukraine overcome the consequences of the COVID-19 pandemic and support its macro-financial stability.
"The program is designed for 12 months. The loan is issued for 14.5 years, which is extremely attractive conditions for Ukraine. This will reduce the burden of paying off foreign debts and support [the country] in the fight against the COVID-19 pandemic," Shmyhal said.
Memorandum and Loan Agreement
Ukraine and the European Commission on July 23, 2020, signed a Memorandum and a Loan Agreement during a working visit to Brussels of Ukrainian Prime Minister Denys Shmyhal, Ukrainian Finance Minister Serhiy Marchenko, and newly appointed Governor of the National Bank of Ukraine (NBU) Kyrylo Shevchenko.
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According to Shmyhal, a EUR 1.2 billion disbursement for Ukraine is the largest one provided by the European Commission under a macro-financial assistance (MFA) program that is exceptional in nature and is envisaged for 10 countries to overcome the negative consequences of the pandemic.
The prime minister stressed that the Cabinet had no plans to hold a dialogue with the National Bank on the additional issue of the national currency.