The Memorandum approved by the IMF Board of Directors on December 18, 2018 contains statement on policy and strategy, which Ukraine intends to adhere within the new program in 2018-2020, and certain steps required for successful inspections and obtaining of the next tranches.
The document contains directions of Ukraine’s work in the monetary and currency policy, fiscal policy and policy of the energy and finance sectors, management, management of state-owned enterprises and business climate, and eight structural aspects.
The implementation of the provisions of the Memorandum will help to encourage $3,9 billion of financial aid from the IMF by the end of the program. The means will be transferred to the National Bank reserves. This will enhance the national currency and will help to create a stable and predictable investments climate.
The decision to open new program and provision of the first tranche worth $1,3 billion was made at the session of the IMF Board of Directors on December 18. It will give Ukraine an opportunity to attract another international financial aid, including $750 million of loan guarantees from the World Bank.
The key demands of the Memorandum are as follows: maintaining the monetary policy; independent National Bank of Ukraine will continue following the policy of the flexible currency; inflation rate will make 7% since December 2018 till December 2019, and 5 +/- 1% in 2020.
Observing this tendency, the Finance Ministry has to present a daily and monthly forecast of the money flow to the National Bank of Ukraine.
Ukraine will be adhering to the approach of the fiscal sustainability in the middle term perspective. In particular, the deficit rate should make 2.5% in 2018 and 2.25% in 2019.
Tax amnesty will not be a part of the program, yet this restriction does not deny the possibility of carrying out a campaign of zero declaration of the assets of the physical entities under the condition of a preliminary agreement on its conditions and justification of the aims with the IMF experts.
At the same time, Ukraine will continue conducting the dialogue with the IMF experts on the possibility of imposing of a tax on the withdrawn capital in the form of a fiscal neutral, balanced and stable pattern of distributed profit taxation.