Ukraine and the International Monetary Fund (IMF) have reached an agreement at the staff level regarding the fourth review of the four-year extended financing credit program (EFF), which paves the way for the allocation of the fifth tranche in the amount of $2.2 billion, Prime Minister Denys Shmyhal said.
Negotiations with IMF experts, held in Kyiv and Warsaw during May 23-31, turned out to be successful. "Previously, Ukraine did not reach the fourth review in any IMF program. Today's agreements are a testament to our commitment to reform and change for our country. Ukraine fulfilled all quantitative criteria and structural beacons until the fourth review. After approval by the Executive Board of the IMF, which should take place in the coming weeks, Ukraine will receive $2.2 billion," Shmyhal said on social media.
The Ministry of Finance emphasized that the IMF supported the National Revenue Strategy developed by the government and the implementation of its provisions. This strategy is one of the structural beacons 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 an appropriate policy 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 on the implementation of jointly defined measures," added Minister Serhiy Marchenko. The priorities for the financial sector indicated by the IMF are listed on the National Bank's website.
A condition for softening the monetary policy of the National Bank will be the preservation of stable inflationary expectations and the attractiveness of hryvnia instruments. A flexible exchange rate will also contribute to the stability of the economy and the currency market.
The IMF emphasized that the needs for budgetary financing remain high. Therefore, the implementation of the budget should take into account financial constraints and the need to restore fiscal and debt stability.
The 2025 budget will require the mobilization of domestic revenues, and the Ukrainian authorities have already planned to raise some taxes. The IMF advises to accelerate the implementation of tax reforms and revenue administration provided for in the National Revenue Strategy.
