Ukraine and IMF Have Agreed on Terms of further Cooperation
Kyiv, 17 November 2010. The Government of Ukraine and the International Monetary Fund have successfully approved the terms of the Stand-By Agreement continuation, which was signed in July this year. This was announced by Thanos Arvanitis, the Head of the latest International Monetary Fund’s mission to Ukraine in his interview to Ukrainian “Radio Svoboda” today.
Yesterday, on November 16, in its official press release the IMF announced a staff level agreement with Ukraine on the first review of the lender’s $15 billion Stand-By loan. The International Monetary Fund (IMF) mission, headed by Thanis Arvanitis, visited Kyiv during November 3–15, to conduct the discussions on the first review under the Stand-By Arrangement (SBA).
According to Arvanitis, the IMF’s Executive Board will consider the review before the end of the year. The completion of the review would release SDR 1 billion (about US$1.6 billion), of which US$1 billion would be provided for budget support.
According to IMF Resident Representative in Ukraine Max Alier, Ukraine could receive the second tranche under SBA by late 2010. As Mr. Alier stressed in his speech at the Ukrainian Banking Forum on November 16, “The government is observing its liabilities to bring order to the fiscal situation… Fiscal policy should be aimed at cutting borrowing in the medium term”
The IMF officials also said they were pleased with Ukraine meeting its liabilities under SBA: “All end-September quantitative performance criteria were met and steady progress was made on structural reforms.”, as it is stressed in IMF’s official press release.
The International Monetary Fund approved a 2 ½-year, $15.2 billion SBA loan program for Ukraine in July 2010. The program’s approval was one of the key factors which allowed the analysts and international rating agencies to positively upgrade Ukraine’s macroeconomic outlook.
In October Fitch Agency announced its forecast for 5 % growth of this year’s Ukrainian GDP. A few weeks earlier Moody’s Investors Service had changed its forecast in respect of Ukraine’s state obligations rate (B2) from negative to stable.