Flash Report /

Ukraine: IMF notes good progress on programme discussions, but not there yet

  • IMF MD Kristalina Georgieva issued a short statement last night on the status of programme negotiations

  • Confirmation that it will be a bigger programme than previously thought, but no specific size given

  • Fund waiting on prior actions on banking resolution framework and land reform; we still see risk of delay

Stuart Culverhouse
Stuart Culverhouse

Chief Economist & Head of Fixed Income Research

Tellimer Research
27 March 2020
Published byTellimer Research

IMF Managing Director Kristalina Georgieva issued a short statement last night on the status of programme negotiations with Ukraine. She noted "very good progress" on the discussions on a new EFF and appeared to confirm what has been reported locally by saying it will be a bigger programme than previously thought ("larger access than previously envisaged"). She didn't specifically mention size, however. Local reports have mentioned the new arrangement will be up to US$10bn. This compares to the US$5.5bn that had been agreed at the time of staff level agreement in December. 

Nor did she mention timing. The statement implied that the Fund is still waiting for the authorities to complete prior actions to do with the adoption of legislation to improve the bank resolution framework (the so called anti-Kolomoisky bill) and on land reform. The former is travelling through Rada currently and is due to be voted on this weekend, amid reports that vested interests may seek to block it. Land reform is also contentious.

There is therefore a risk of further delay, and that programme approval doesn't come through as quickly as locals seem to suggest (if not at all?). With the government and its supporters warning over the dangers of not reaching an agreement with the Fund (the D-word has been mentioned), the question for those that oppose the necessary legislation is: are they really prepared to push Ukraine over the cliff?