You're reading: NBU: Quick resumption of IMF program is vitally important

The further delay with the resumption of cooperation with the International Monetary Fund (IMF) could have negative consequences both for Ukraine's financial stability and welfare of its citizens, the National Bank of Ukraine (NBU) has said in regard with a Wednesday warning of IMF Managing Director Christine Lagarde that cooperation could be frozen.

“We believe that it is vitally important to resume cooperation with international donors, first of all, with the IMF,” the NBU said in a statement spread late on Wednesday.

The central bank said that the NBU is taking measures to ensure the macroeconomic and financial stability via conducting the moderate monetary policy to reduce inflation to the target of 12% for late 2016 and currency interventions to smooth extra fluctuations of the hryvnia exchange rate.

“External shocks and internal political instability are a threat to the achievement of these goals,” the NBU said.

The central bank added that resumption of cooperation with the IMF and other donors is a precondition for growth of forex reserves from $13.4 billion to $19.6 billion for late 2016 and it would be a positive signal for other international donors and private investors to stimulate the acceleration of economic growth and positively influence the country’s balance of payment.

As reported, Lagarde said that it is hard to continue cooperation with Ukraine under the Extended Fund Facility (EFF) for the IMF without a substantial effort to fight corruption.

“I am concerned about Ukraine’s slow progress in improving governance and fighting corruption, and reducing the influence of vested interests in policymaking. 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 in a statement published on Wednesday.

“Ukraine risks a return to the pattern of failed economic policies that has plagued its recent history. It is vital that Ukraine’s leadership acts now to put the country back on a promising path of reform,” she said.