The International Monetary Fund (IMF) expects the Ukrainian authorities to swiftly implement the precondition measures set by the IMF Executive Board before it considers the new $17.5 billion Extended Fund Facility Arrangement for Ukraine, at its meeting scheduled for March 11.
“The disbursements under the program will be heavily front-loaded, including a significant initial disbursement upon approval. We are convinced that this will help achieve rapid macroeconomic stabilization,” the Fund said in a press release.
IMF staff are in close contact with the National Bank of Ukraine and stand ready to assist in designing measures that will address excessive and temporary imbalances in supply and demand on the foreign exchange, the Fund said.
As reported, the IMF Mission, which has worked in Kyiv from Jan. 12 to Feb. 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 15.5 billion euros).
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.
