Ukraine is mulling a plan to preserve IMF funds if US aid ends
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Ukraine is considering a plan to expand domestic bond sales, raise taxes and cut spending to reduce its budget deficit and secure funding from the International Monetary Fund (IMF). Writes about this Bloomberg with reference to Ukrainian officials.
According to the agency, Ukrainian authorities intend to propose this plan to IMF representatives during their visit to Kyiv on February 12. Such measures, Bloomberg’s interlocutors say, are needed to guarantee the fund’s ability to service Kyiv’s debts in the event that its allies are unable to provide financial assistance. This is one of the conditions of the $15.6 billion loan program, the sources said.
The visit of IMF representatives to Kyiv precedes the consideration of a loan program that will make it possible to receive a tranche of assistance worth $900 million, the agency writes. The Central Bank of Ukraine and the IMF declined to comment.
According to Bloomberg interlocutors, the Ukrainian Ministry of Finance and the country’s Central Bank believe that the IMF board of directors may not approve the next loan payment if US assistance does not arrive. The main replacement for United States funds will be increased domestic government borrowing. The Ukrainian government expects the country’s banks to continue investing in government bonds.
In March 2023, the IMF for the first time approved a four-year loan to a country in which hostilities are taking place. The program was coordinated by the European Union and G7 countries – they promised to provide financial assistance to Ukraine to help cover its budget deficit.
February 7 procedural vote in the US Senate didn’t pass bipartisan deal for $118 billion in aid to Ukraine, Israel and border security in the southern United States. The next day the country’s Senate voted for considering a bill to allocate $95 billion – it does not contain an article on financing measures to strengthen borders.
Read more in the publication “Kommersant” “Aid to Ukraine stuck in Senate”.
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