Central bank chief tells of main issues in IMF talks

Governor of the National Bank of Ukraine (NBU), Kyrylo Shevchenko, says the regulator has no unfulfilled obligations before the International Monetary Fund (IMF), Ukraine's key lender.

The Finance Ministry and the IMF are now discussing key indicators of the 2021 national budget, he told the Ukrainian online newspaper ZN.UA on October 8.

"In particular, [discussion is underway] on revenues, budget deficit, and its financing. We understand that in the medium term, it would be desirable to cut the budget deficit to 2%-3% of GDP. But it's very difficult to do so in the current situation as the economy is suffering a recession," Shevchenko said.

"As far as I know, one of the debatable issues today is the issue of budget spending from the COVID-19 relief fund," the NBU governor added.

Read alsoLenders warn Ukraine of possible issues over anti-graft prosecutor replacementShevchenko also noted certain concerns regarding Ukraine's anti-corruption policy, which is also part of the memorandum signed with the IMF.

"In fact, it is not the number of tranches that's important to us now, but the very fact of continued fruitful cooperation. The IMF is not about money, it's about trust. I hope that the Ukrainian side will do its utmost to ensure that the IMF financing resume by year-end," he added.

Shevchenko at NBU helm: Background

The Verkhovna Rada, Ukraine's parliament, on July 16 backed the appointment of Kyrylo Shevchenko, head of state-run Ukrgasbank, as new governor of the National Bank, replacing Yakiv Smolii who had resigned.

Ukraine-IMF cooperation: Latest

• The IMF's Executive Board on June 9, 2020, 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, 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.
• The Finance Ministry plans to receive the second disbursement under the new program by year-end.
• Ukrainian Prime Minister Denys Shmyhal on September 2 announced that a letter had been sent to the Managing Director of the International Monetary Fund, Kristalina Georgieva, offering that the review mission works in conference mode.