The Cabinet of Ministers has endorsed a draft letter of intent of the government and the National Bank of Ukraine (NBU) to the International Monetary Fund (IMF) and a draft memorandum of economic and financial policies.
Under the resolution No. 129 as of February 27 posted on the government’s website, the Cabinet authorized Ukrainian Finance Minister Natalie Jaresko to sign the aforementioned letter.
As reported, the IMF Mission, which has worked in Kyiv from January 12 to February 11, 2015, reached an agreement with the Ukrainian authorities on the Extended Fund Facility (EFF) Arrangement worth SDR 12.35 billion (around $17.5 billion or EUR 15.5 billion).
The four-year Extended Fund Facility (EFF) will replace the stand-by program worth 16.67 billion, and envisages broader international financial support.
A precondition for the approval of the program by the IMF Executive Board is the adoption by the Ukrainian government of a two-year schedule on increasing electricity tariffs for households, accompanied by increasing subsidies at the expense of increased rent payments made by state-owned oil and gas companies, which in turn will receive the right to sell their products at a higher price; and introducing amendments to the 2015 state budget on pension and banking legislation. The government expects that the Verkhovna Rada will pass the relevant bills on March 3.
