In a statement, the IMF stated that it and Ukraine had reached an agreement on economic reforms that will prepare the way for the country’s 18-month standby agreement to be reviewed and its request for an extension to the end of June to be considered.
A total of $700 million will be disbursed to the country once the first review of the $5 billion agreement is complete, which is currently scheduled to end in December.
It is envisaged that IMF management and the executive board would approve the accord and the request for a program extension in November.
Last year, Ukraine agreed to a $5 billion IMF loan package, but the funds have been essentially blocked due to reform concerns.
From the 21st of September to the 18th of October, IMF personnel held remote consultations with Ukrainian authorities.
The virtual mission’s leader, Ivanna Vladkova Hollar, said the two sides had reached agreement on an updated set of economic, financial, and structural policies to help address the economic and health crisis caused by COVID-19, while maintaining macroeconomic and financial stability, reducing vulnerabilities, and addressing key barriers to private investment. She added.
While protecting vulnerable people and enhancing tax administration, she said the program’s focus was on restoring fiscal policies to settings compatible with medium-term debt sustainability and lowering risks from “quasi-fiscal operations,” especially in the energy sector.
IMF also wanted to revive private sector financing, combat corruption, and move judicial reform ahead. The IMF also wanted to improve the business climate.