The IMF is still waiting for Ukraine to fulfill previously agreed measures for the resumption of the stand-by lending program, Director of the IMF External Relations Department Gerry Rice has said.
“Mr. Lipton confirmed that actions are necessary to ensure that the
program objectives are met, including fiscal consolidation, energy
reforms, and financial sector reforms,” Rice said at a traditional
briefing at the IMF HQ at the end of last week following the talks of
Ukrainian Finance Minister Yuriy Kolobov with IMF First Deputy Managing
Director David Lipton.
“Kolobov and Lipton met recently and discussed the economic
developments in Ukraine, and the near-term prospects and challenges
facing Ukraine. They also discussed the recent Article IV mission to
Ukraine, which was around the end of May,” he said.
In line with the existing practice, consultations in the framework of
Article IV of the IMF charter are held annually. The Executive Board
discussed the mission report at its session on June 29, its contents has
not been disclosed yet.
Head of the IMF mission Christopher Jarvis said after the visit to
Kyiv that the Fund is ready to return to the issue of financing Ukraine
but only after it sees the determination of the country’s authorities to
continue corresponding reforms. Among the conditions for the resumption
of financing, he named a hike in gas prices for households, greater
flexibility of the exchange rate, achieving the planned budget deficit
size, and the fulfillment of a number of objectives in the banking
sector.
In 2010, the IMF decided to cancel the 2008 stand-by program under
which the country had received $11 billion after the presidential
election and the change of the government. At the end of July 2010, the
IMF decided to resume cooperation with Ukraine under a new stand-by
program worth SDR10 billion (over $15 billion). However, Kyiv received
only around $5 billion because the new program was frozen at the stage
of the second review in spring 2011. For over a year, Ukraine has been
trying to persuade the IMF to drop out the question of subsidizing
natural gas tariffs for households until the completion of gas talks
with Russia.
