The first tranche from the International Monetary Fund will be $1.5 billion based on a new 14-month SBA program. The Ukrainian News agency reported this citing the source familiar with the results of the negotiations.
‘The first tranche will amount to 1.5 billion dollars, the second and third tranche will amount to 1.2 billion dollars each, the agency’s source said and predicted that Ukraine could receive more than 2.5 billion dollars from the funder by the end of 2018.
Previously, the National Bank of Ukraine assumed that the amount of the first IMF tranche could be 1.5-1.9 billion dollars. The Ministry of Finances claimed that all the money received would be transferred to the reserves of the National Bank of Ukraine.
The Cabinet of Ministers of Ukraine expects the first tranche from the funder will be sent yet in December 2018. The head of the press office of the IMF Gerry Rice has also predicted the receipt of the new tranche by the end of 2018.
‘We are now awaiting that the session of the Executive Council (IMF) will be held later this year, after the implementation (by Ukrainian side) of previous actions, which to allow to approve the budget for 2019 in the Parliament and to increase tariffs for heating, according to achieved agreement (increase by 23.5% from November 1, 2018),’ the IMF representative noted.
As we reported earlier, on October 19, the Government adopted the decision on the gas price increase by 23.5 percent from November 1. Within one hour after the relevant decision of the Cabinet of Ministers, a statement appeared on the website of IMF that Ukraine and the Fund reached an agreement on a new 14-months-long support program of economic policy Stand-By Arrangement (SBA), which is supposed to replace the Extended Fund Facility (EFF), which is adopted in March 2015 and expires in March 2019.
The Monetary Fund expects that the IMF Council will adopt the program by the end of 2018 under the condition that Ukraine fulfills all agreements. That includes the adoption of the state budget by the Ukrainian Parliament, which corresponds to the recommendations of the Fund.
The credit program for Ukraine in the amount of $17.01 billion was approved by the IMF at the end of April 2014, and the first tranche of Stand-By Arrangement loan in the amount of $ 3.19 billion was granted in early May.
In March 2015, the Board of Directors of the International Monetary Fund approved the allocation of $ 17.5 billion to Ukraine under the 4-year EFF (Extended Fund Facility) program instead of the SBA program.
The SBA program has been replaced by the Extended Fund Facility due to the longer need of the balance of payments of Ukraine.