The International Monetary Fund and Ukraine have begun negotiations on the implementation of a new four-year Extended Fund Facility (EFF) program, which is preliminarily estimated at $8 billion. The discussions focus on the government’s economic policy, including fiscal and monetary policies aimed at supporting macro-financial stability amid ongoing high uncertainty.
This is reported by Business • Media
“The discussions will focus on the objectives of the government’s economic policy, emphasizing both fiscal and monetary policies to ensure stability in the face of continuous extremely high uncertainty, as well as structural measures aimed at strengthening governance, combating corruption, and supporting economic growth,”
Involvement of the NBU and Key Tasks of the New Program
A team from the National Bank of Ukraine is participating in the negotiations, discussing macroeconomic indicators, directions for interest and exchange rate policies, as well as further reforms in the financial sector. Ukraine aims to agree on a new program with the IMF by the end of the year, as most of the funds from the current $15.5 billion program have already been utilized. The current IMF program is set to last until 2027; however, according to the explanations of NBU Chairman Andriy Pyshny, it is more focused on post-war reconstruction, while the war continues, and subsequent budgets remain wartime budgets.
Impact of Corruption Scandals and Demand for New Support
On September 9, Prime Minister Yulia Svyrydenko sent a letter to IMF mission chief Gavin Gray requesting the initiation of a new cooperation program to support Ukraine in the coming years. At the same time, as emphasized by the head of the Verkhovna Rada Committee on Finance, Danylo Hetmantsev, the situation is complicated by corruption scandals in the energy sector, which negatively affect the progress of negotiations with the IMF. According to Hetmantsev, the loss of trust among partners due to these scandals is a serious problem and is openly discussed in meetings with international partners.