IMF ends review of Ukraine’s loan, withholds next tranche

The International Monetary Fund (IMF) has ended a remote review of its $5 billion loan program with Ukraine but didn’t clear the next tranche because conditions haven’t been met.

According to the IMF, it held discussions with the Ukrainian government for more than a month as the country sought a $700 million disbursement, originally due in September 2020. Talks focused on areas including strengthening governance of the central bank, improvements to the legislative and regulatory framework for bank supervision, and strengthening anti-corruption systems.

“The discussions were productive, but more progress is needed to support completion of the first review under the program.

“Discussions will continue,” Goesta Ljungman, head of the IMF’s Ukraine office, said in a statement on Saturday.

Ukraine wants the next chunk of IMF assistance to help mitigate the damage the coronavirus crisis is doing to its economy, with the country of 40 million people exiting its latest lockdown last month.

The disbursement is being held up because of concerns over waning anti-graft efforts, threats to central bank independence and the reintroduction of natural gas subsidies for households which is sapping state coffers.

Other international aid, including from the European Union, is dependent on Ukraine’s progress with the IMF.

Source: Bloomberg