Press Release No. 21/301

IMF Team and Ukraine’s Authorities Reach Staff-Level Agreement on the First Review of the Stand-By Arrangement

October 18, 2021

• IMF staff team and Ukrainian authorities reached a staff-level agreement on policies to support the country’s reforms in the context of the Stand-by Arrangement (SBA).
• This paves the way for consideration of the first review of the Stand-By Arrangement (SBA) and request for an extension of the program by the IMF’s Executive Board.
• Completion of the first review would enable disbursement of SDR 500 million (about US$ 700 million).

Washington D.C.: An International Monetary Fund staff team led by Ms. Ivanna Vladkova Hollar conducted remote discussions with the Ukrainian authorities on the country’s Stand-By Arrangement from September 21 to October 18. At the conclusion of the discussions, Ms. Vladkova Hollar made the following statement:

“An International Monetary Fund (IMF) mission team and Ukraine’s authorities have reached a staff-level agreement on an updated set of economic, financial, and structural policies to help address the economic and health crisis caused by COVID-19, while maintaining macroeconomic and financial stability, reducing vulnerabilities, and tackling key obstacles to private investment.

“As the recovery takes hold, the program’s focus is on
(i) returning fiscal policies to settings consistent with medium-term debt sustainability while protecting the socially vulnerable, strengthening revenue administration, and reducing fiscal risks from quasi-fiscal operations, including in the energy sector; (ii) safeguarding central bank independence and focusing monetary policy on returning inflation to its target; (iii) ensuring banks’ financial health, including through good governance, with the goal of reviving sound bank lending to the private sector; (iv) tackling corruption and pushing forward with the implementation of judicial reform; and (v) reducing the role of the state and vested interests in the economy to improve the business environment, strengthen corporate governance, attract investment and raise the economy’s potential.

“The agreement as well as the authorities’ request for program extension to end-June 2022 are subject to approval by Fund Management and the IMF Executive Board. Continued steadfast implementation of strong policies in these areas, consistent with objectives under the program and agreed commitments, will pave the way for the IMF Executive Board’s consideration of the review, expected in November.”

Ukraine’s 18-month SBA with an access of SDR 3.6 billion (equivalent to US$5 billion) was approved on June 9, 2020 (see Press Release No. 20/239 ) to provide balance of payments and budget support to help the authorities address the effects of the COVID-19 shock, while consolidating achievements, and moving forward on important structural reforms to reduce key vulnerabilities.