Ukraine and the International Monetary Fund (IMF) have reached a staff-level agreement on the fourth review of the four-year Extended Fund Facility (EFF), paving the way for the allocation of a fifth tranche of $2.2 billion. This was announced by Prime Minister Denys Shmyhal.
Negotiations with IMF experts, held in Kyiv and Warsaw on May 23-31, were successful. “Previously, Ukraine had not reached the fourth review in any IMF program. Today’s agreements are evidence of our commitment to reforms and changes for our country. Ukraine has met all quantitative criteria and structural milestones for the fourth review. After approval by the IMF Executive Board, which is expected to take place in the coming weeks, Ukraine will receive $2.2 billion,” Shmyhal noted on social media.
The Ministry of Finance emphasized that the IMF supported the National Revenue Strategy developed by the authorities and the implementation of the provisions set out therein. This strategy is one of the structural pillars of the IMF program.
“I am grateful to the International Monetary Fund team for effective and coordinated cooperation. An important element of our partnership is the formation of appropriate policies in the financial and monetary spheres, which allows us to effectively respond to the challenges of a full-scale war. And Ukraine continues to work hard in conditions of extreme uncertainty to implement jointly determined measures,” Minister Serhiy Marchenko added. The National Bank’s website lists the priorities for the financial sector, which the IMF indicated.
The National Bank's easing of monetary policy will depend on maintaining stable inflation expectations and the attractiveness of hryvnia instruments. A flexible exchange rate will also contribute to the stability of the economy and the foreign exchange market.
The IMF stressed that budgetary financing needs remain high. Therefore, budget implementation must take into account financial constraints and the need to restore fiscal and debt sustainability.
The 2025 budget will require domestic revenue mobilization, and the Ukrainian authorities have already planned to increase some taxes. The IMF advises accelerating the implementation of tax reforms and revenue administration envisaged in the National Revenue Strategy.
