Kyiv, July 2 (Interfax) – The IMF is still waiting for Ukraine to fulfill previously agreed measures for the resumption of the stand-by lending program, Director of the IMF External Relations Department Gerry Rice has said.
“Mr. Lipton confirmed that actions are necessary to ensure that the program objectives are met, including fiscal consolidation, energy reforms, and financial sector reforms,” Rice said at a traditional briefing at the IMF HQ at the end of last week following the talks of Ukrainian Finance Minister Yuriy Kolobov with IMF First Deputy Managing Director David Lipton.
“Kolobov and Lipton met recently and discussed the economic developments in Ukraine, and the near-term prospects and challenges facing Ukraine. They also discussed the recent Article IV mission to Ukraine, which was around the end of May,” he said.
In line with the existing practice, consultations in the framework of Article IV of the IMF charter are held annually. The Executive Board discussed the mission report at its session on June 29, its contents has not been disclosed yet.
Head of the IMF mission Christopher Jarvis said after the visit to Kyiv that the Fund is ready to return to the issue of financing Ukraine but only after it sees the determination of the country’s authorities to continue corresponding reforms. Among the conditions for the resumption of financing, he named a hike in gas prices for households, greater flexibility of the exchange rate, achieving the planned budget deficit size, and the fulfillment of a number of objectives in the banking sector.
In 2010, the IMF decided to cancel the 2008 stand-by program under which the country had received $11 billion after the presidential election and the change of the government. At the end of July 2010, the IMF decided to resume cooperation with Ukraine under a new stand-by program worth SDR10 billion (over $15 billion). However, Kyiv received only around $5 billion because the new program was frozen at the stage of the second review in spring 2011. For over a year, Ukraine has been trying to persuade the IMF to drop out the question of subsidizing natural gas tariffs for households until the completion of gas talks with Russia.
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