IMF board approves $1 billion tranche to Ukraine

WASHINGTON, Sep 15 (PRIME) -- The executive board of the International Monetary Fund (IMF) has approved providing a U.S. $1 billion tranche of financial aid to Ukraine, the IMF said late Wednesday.

“The Executive Board of the International Monetary Fund today completed the second review of Ukraine’s economic program supported by an arrangement under the Extended Fund Facility (EFF). The completion of this review enables the disbursement of SDR 716.11 million (about $ 1 billion), which would bring total disbursements under the arrangement to SDR 5,444.21 million (about $7.62 billion),” the statement said.

On Monday, Russian Finance Minister Anton Siluanov said Moscow would vote against the new tranche of financial aid to Ukraine. The IMF financial assistance program for Ukraine should have included Ukraine’s repayment of a $3 billion debt to Russia, but this was not done, Siluanov said then.

IMF Managing Director Christine Lagarde said after the board meeting that “Ukraine is showing welcome signs of recovery, notwithstanding a difficult external environment and a severe economic crisis.”

“Activity is picking up, inflation has receded quickly, and confidence is improving. Gross international reserves and bank deposits have risen. While the social and economic cost of the crisis has been high, growth is expected to be higher in the period ahead. This progress owes much to the authorities’ program implementation, including sound macroeconomic policies, bold steps to bring energy tariffs to cost-recovery levels, and measures to rehabilitate the banking system,” she said.

The four-year financial assistance program for Ukraine encompasses allocation of a total of $17.5 billion. In March 2015, the first, $5 billion tranche was allocated, and the second, $1.7 billion tranche was provided in August of that year.

Alexei Mozhin, IMF executive director for Russia, told PRIME that only Moscow voted against the allocation of the $1 billion tranche to Ukraine.

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