IMF mission arrives in Ukraine to conclude discussions on 2012 Article IV consultation

A mission from the International Monetary Fund (IMF) led by Christopher Jarvis has arrived in Ukraine to conclude discussions on the 2012 Article IV consultation (commitments with respect to the exchange rate regime), the IMF Resident Representative Office in Ukraine told Interfax-Ukraine. At the end of last week, Deputy Director of the IMF External Relations Department David Hawley said that the mission would deal with the 2012 Article IV consultation, and not the program of cooperation with Ukraine.

"The revision [of the stand-by program] for Ukraine is frozen," Hawley said.

Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with members, usually every year.

In mid-April 2012, IMF Resident Representative in Ukraine Max Alier said that Ukraine had achieved progress in the monetary and currency policy, but it was less noticeable than had been expected.

As reported, after the presidential election and government reshuffles in Ukraine in early 2010, the 2008 Stand-By Agreement (SBA), under which Ukraine received $11 billion, was suspended. In late July 2010 the IMF decided to renew its loan partnership with Ukraine through a new SBA worth SDR 10 billion (about $15.6 billion). In late July 2010, Kyiv received the first tranche of SDR 1.25 billion under the new program. The IMF decided in December 2010 to allocate a second tranche worth SDR 1 billion.

The program foresaw future quarterly allocations of eight more tranches starting from the middle of March 2011 in the case of there being further successful cooperation. However, an IMF mission that worked in Kyiv in March 2011 could not recommend to the IMF Executive Board that it approve a new tranche for Ukraine.

Since that time Ukraine has been trying to convince the IMF to remove the issue of backing the price of natural gas for the population until the gas talks with Russia are over.