Chief banker: Delay in fulfillment of obligations to IMF can affect economic recovery

A significant delay or suspension of the fulfillment of obligations to the International Monetary Fund (IMF) can not only slow down the economic recovery, but also significantly worsen inflation and devaluation expectations in Ukraine.

This was announced by Governor of the National Bank of Ukraine (NBU) Kyrylo Shevchenko at a briefing on October 22.

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"Cooperation with the Fund is a basic prerequisite for full financing of the state budget deficit. Another important point is obtaining financing from international partners that is correlated with the IMF's program. This support is necessary for the rapid recovery of the Ukrainian economy," Shevchenko said.

The chief banker noted that an effective dialogue with international partners is the key to maintaining macrofinancial stability. According to him, cooperation with the IMF will allow the country to continue fulfilling the external obligations of the state and increase its international reserves to US$29-30 billion in the coming years.

Ukraine-IMF cooperation

• On June 9, 2020, the IMF's Executive Board approved an 18-month Stand-By Arrangement for Ukraine with funding equivalent to SDR 3.6 billion (about US$5 billion), aimed at helping Ukraine overcome the consequences of the COVID-19 pandemic.
• On June 12, 2020, Ukraine received the first disbursement of the IMF loan worth US$2.1 billion under the new 18-month cooperation program between Ukraine and the Fund.
• On October 21, 2020, Ukraine's Cabinet of Ministers set up an ad hoc group to coordinate talks with the IMF.