International Monetary Fund approved providing Ukraine with a record $15.6 billion loan. The IMF Board has already signed this aid package for our country.
This was reported by Bloomberg on Friday, March 31, citing an informed source. It is noted that in this way the IMF finally approved the first ever institution loan to a country that is at war.
The IMF Executive Board today approved a $15.6 billion four-year financing package for Ukraine. He should help Kyiv cover urgent financial needs against the background of the war with the Russian Federation. This loan is the largest for our country since the beginning of the full-scale war of the Russian Federation in February 2022.
A group of Ukraine’s creditors backed an unprecedented agreement requiring the IMF to change its lending rules, with assurances that they would extend the moratorium on debt repayments for the duration of the program.
The creditors in this case are Canada, France, Germany, Japan, the United Kingdom and the United States. They called on other creditors to help restore solvency to Ukraine, whose economy has shrunk by about a third since Russia’s invasion last year.
The news was commented by Prime Minister of Ukraine Denys Shmihal Twitter. “This will help finance the budget deficit and maintain macro-financial stability. An important decision for victory and renewal,” he wrote.
It is known that Ukraine’s financing program will consist of two stages. During the first, which will last 12-18 months, Kyiv will take measures to strengthen fiscal, external, price and financial stability, including the abolition of monetary financing.
During the second phase, Ukraine will move towards broader reforms to enhance macroeconomic stability and support the country’s recovery and reconstruction. In particular, this is also necessary within the framework of our country’s aspiration to join the European Union. During this period, Ukraine is expected to return to pre-war policy fundamentals, including a flexible exchange rate and an inflation-targeting regime, according to the IMF.
IMF staff forecasts for the Ukrainian economy this year range from a contraction of 3% to growth of 1% after a 30% decline in 2022.
As GLOBAL HAPPENINGS reported 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.
It was also reported that Ukraine, within the framework of the new program, should abandon the use of the “printing press”, and at the second stage – abandon the fixed dollar exchange rate.
Source: Obozrevatel
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