The staff-level mission of the IMF has decided to allocate a $15.6 billion loan to Ukraine within the framework of expanded financing. The decision after that must be approved by the Board of Directors of the IMF. Ukraine, within the framework of the new program, must abandon the use of the “printing press”, and in the second stage – abandon the fixed dollar exchange rate.
According to the press service of the NBU, Ukraine will receive money from the IMF within four years. The Board of Directors will make a decision in the coming weeks. Ukraine must go through two stages of changes within the framework of the program. First of all:
- refusal of issued financing (printing press);
- strengthening revenue mobilization;
- reforms to strengthen anti-corruption foundations.
The implementation of these conditions will continue for 12-18 months. Then the second stage will come. Then more ambitious reforms are expected. Interestingly, the NBU press release says that already at the second stage Ukraine can become a member of the EU (this decision will be considered by the EU countries regardless of the program with the IMF). In the second stage, the floating exchange rate of the dollar will be returned (now the official exchange rate is fixed by the NBU).
In addition, “competition in the critical energy market and a simultaneous reduction in quasi-fiscal obligations” should appear. Probably, we are talking about the transition to market tariffs for gas and electricity. “International partners believe in Ukraine and are ready to help us. They see the incredible adaptability of our economy after attacks on critical infrastructure,” said NBU Governor Andriy Pyshny.
As GLOBAL HAPPENINGS wrote earlier, the new program should make it possible to overcome Ukraine’s massive budget deficit. In 2023, you can count on 4-5 billion dollars.
Source: Obozrevatel
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