Ukraine finance minister expects only USD 1.7 bln from IMF this year

The Ukrainian government expects to receive an additional USD 4 bln in external financial support by the year end, Finance Minister Natalie Jaresko told an Oct 16 press briefing. “The sum includes a USD 1.7 bln IMF wire and USD 2.3 bln from other international partners, which are conditional on the IMF program implementation,” Jaresko said.

Initially, the schedule of payments presumed a USD 1.7 bln IMF wire at the end of September and USD 1.7 bln at the end of December, or nearly USD 10 bln for the entire year. So far, Ukraine has received USD 6.7 bln, with the last wire arriving in August, which disrupted the initial schedule.

The latest IMF mission completed on Oct. 2 its 11-day visit as part of its second review of the third tranche of its four-year, USD 17.5 bln loan program. Afterwards, the IMF announced it will continue discussions since it did not gain a clear vision from Ukraine’s Cabinet on its policy plans for 2016.

Jaresko’s Oct. 16 remarks concentrated on the need for budget cuts in the context of tax reform to meet the IMF’s requirement of a 3.7% of GDP deficit for 2016.

Alexander Paraschiy: Ukraine was on track to receive USD 3.3 bln in two IMF wires by the year end, according to the initial schedule. The government’s stalled negotiations with the Fund have undermined this plan, throwing into question its USD 18.3 bln target on gross international reserves accumulation. Against this backdrop, it would have been logical for Ukrainian authorities to request merging the third and fourth wires, of USD 1.7 bln each, into one tranche. But the authorities have already said they won’t make such a request. This means that gross international reserves will be only slightly above USD 15 bln by the end of 2015, which is far below the target for the year. However, underperformance in reserves as of end-2015 (which nonetheless will double on a yoy basis) is unlikely to affect hryvnia stability in the coming months.

Источник: Конкорд Капитал