The Ukrainian government is planning to sign a new memorandum on economic and financial policy and a letter of intent on cooperation with the International Monetary Fund (IMF) by the end of the current week, according to Deputy Finance Ministry Tetiana Yefimenko.
"Ukraine will sign all corresponding documents and submit them to the IMF by the end of the week," she told reporters on Tuesday.
She said Ukraine expects that the first tranche from the IMF under the new loan agreement under the Stand-By Arrangement (SBA) will be worth more than UAH 10 billion (about $1.3 billion).
As was reported earlier, an IMF mission that worked in Kyiv June 21 through July 3, 2010, has recommended to the IMF Executive Board that the fund lend $14.9 billion to Ukraine under the SBA. In return, the fund expects changes in legislation related to the budget and the financial sector. The IMF will also insist on a limit of the deficit of the consolidated budget to 5.5% of GDP in 2010 and 3.5% of GDP in 2011.
Moreover, the IMF put forward a condition under which the Ukrainian authorities should raise gas supply prices, implement tax and pension reform and enhance the independence of the country’s central bank.
The Ukrainian parliament has already decided on a reduction in budget spending: its deficit has been cut from 5.3% of GDP to 4.99%. The lawmakers also passed corresponding amendments to the law on the National Bank of Ukraine.
