You're reading: Ukraine’s Finance Ministry pays $634 million to IMF

The Finance Ministry of Ukraine paid the International Monetary Fund (IMF) SDR 413.75 million ($634 million, or UAH 5.069 billion) in February as repayment for funds provided under the stand-by arrangement in 2008-2009.

These are the first payments to the fund this year, the next one is to be made in May, the Finance Ministry said in a statement issued on Tuesday.

The ministry said these expenditures are foreseen in the state budget for this year.

According to the IMF, the payments were made on February 7 and February 12.

As reported, Ukraine’s payments to the International Monetary Fund (IMF) in 2012 amounted to SDR 2.43 billion ($3.74 billion at the current exchange rates), including SDR 198 million in interest – a record in the entire history of relations between Ukraine and the fund since 1994.

According to the IMF’s materials, in 2011 Ukraine did not receive any money from the fund, but its payments were smaller – SDR 230 million.

Over 19 years of cooperation, the IMF had issued SDR 12.26 billion to Ukraine and has been repaid SDR 6.6 billion, including SDR 1.36 billion in interest.

According to the fund, the record high figure of payments in 2012, which was related to the maturity of short-term credits issued after the 2008 crisis, could be surpassed in 2013: Ukraine will have to repay SDR 3.77 billion ($5.8 billion), including SDR 110 million in interest.

The payments have to be made in four tranches from January 30 to February 12, from April 30 to May 8, from July 30 to August 12 and from October 30 to November 12. In the first three cases, Ukraine will have to pay SDR 900 million ($1.4 billion), while in the latter one it will pay SDR 1.05 billion ($1.61 billion).

According to the IMF’s Web site, in 2014 Ukraine’s payments will be reduced to SDR 2.41 billion, in 2015 – to SDR 980 million, and in the next two years they will be less than SDR 1 million.

The Fitch international rating agency in early November last year noted that such a level of payments to the IMF is likely to exceed Ukraine’s capabilities for foreign borrowing, and partial refinancing by the IMF would be needed.

The Ukrainian authorities are currently trying to open a new Stand-By Arrangement with IMF for SDR 10 billion. The previous Stand-By Arrangement for SDR 10 billion between Ukraine and the IMF formally terminated in December 2012. It was opened late in July 2010. However, the country was able to obtain only two tranches worth SDR 2.25 billion in total. The new program was frozen at the stage of the second review in the spring of 2011. For a year and a half, Ukraine has been trying to persuade the IMF to drop its objections to the government’s subsidizing natural gas tariffs for households until the completion of its gas talks with Russia.

Ukraine’s international reserves in 2012 fell by 22.8%, or $7.25 billion, to $24.55 billion.