The mission of the International Monetary Fund (IMF) will work in Kyiv from Sept. 22 to Oct. 22 with the purpose of the second review of the Extended Fund Facility program (EFF) for Ukraine, Governor of the National Bank of Ukraine (NBU) Valeriya Gontareva said at a meeting with bankers held on Sept. 8.
“I hope that we would meet all the criteria and receive the third tranche of the credit under the EFF program in October. If we make it this year and receive the fourth tranche, our forex reserves would grow to $18 billion by the end of the year,” the press service of the central bank reported, citing Gontareva.
She said that the minimum forex reserve target for the end of the year – $15 billion – would be reached. This covers over three months of imports.
As reported, the four-year EFF program worth SDR 12.348 billion (about $17.23 billion at the current rate) was opened in March 2015. In March 2015, the IMF gave Ukraine a first tranche worth about $5 billion under the program. Of the amount, about $2.7 billion was given to the government to prop up the national budget, the remaining funds were transferred to the NBU.
The EFF originally foresaw a quarterly review of the program, and allocation of three more tranches worth SDR 1.18 billion (about $1.67 billion) in 2015 and a decrease in quarterly tranches in 2016-2018 to SDR 0.44 billion ($0.63 billion).
An IMF mission for the first EFF review worked in Kyiv May 12 through June 11. It originally planned to complete its work in late May or early June so that a decision on the second tranche under the EFF could have been taken by the end of June. However, it was announced early in July that a staff-level agreement had been reached on a set of policies needed to complete the first review under the EFF, and the agreement was subject to approval by IMF management and the Executive Board once the prior actions were completed and the conditions were in place for staff to assess that the public debt was sustainable with high probability, and that the program was fully financed.
The IMF Executive Board gave the green light for the second tranche worth $1.7 billion on July 31, 2015.
