Ukraine should pass 24 bills before the end of May to secure a $1.7 billion tranche from the International Monetary Fund, $1 billion worth of loan guarantees from the U.S. and a EUR 105 million assistance from the European Union, according to Deputy Head of Presidential Administration Dmytro Shymkiv who spoke at a briefing after the meeting of the National Reform Council.
”Regarding cooperation with the IMF – we need to adopt 19 draft laws. Their adoption paves the way for the next tranche of the Fund in the amount of $1.7 billion, as well as additional U.S. Government guarantees worth $1 billion… With regard to cooperation with the EU – EUR 105 million is at stake for Ukraine within the third tranche of macro-financial assistance. It is necessary to pass five bills for this,” he said.
According to Shymkiv, two bills have already been tabled to the Verkhovna Rada, five draft laws have been adopted by Parliament in the first reading, two bills are withdrawn and require government revision, and 15 bills require re-submission to the parliament because of the dismissal of the Government.
As UaPosition reported earlier, the Finance Ministry in January said that Ukraine plans to attract about $10 billion from international financial institutions in 2016, including $5.8 billion from the IMF and over $1.5 billion on new credit programs of the World Bank. From the U.S. Government Ukraine plans to get $1 billion in loan guarantees, up to $1.3 billion from the Japanese Government, $0.2 billion from Switzerland, and EUR 1.2 billion from the EU, plus an additional EUR 170 million euros in grants. The Government of Poland is expected to allocate EUR 100 million, EUR 300 million may come from Germany as well as EUR 150 million for investment projects. EBRD is expected to disburse $177 million on the existing investment projects and another $1.1 billion on the new investment projects; EIB plans to allocate $175 million for existing projects, plus $1.1 billion of investments in the new projects.
Ukraine`s foreign exchange reserves will be replenished gradually, along with the receipt of funds from international financial institutions, the key of which is the IMF. In particular, the National Bank of Ukraine predicts growth of foreign exchange reserves by the end of 2016 to $19.6 billion, and in 2017 – to $22.3 billion. To date, Ukraine`s international reserves account to $12.722 billion.
In March 2015, the IMF approved an Extended Fund Facility (EFF) loan program for Ukraine totaling $17.5 billion for a period of four years. Ukraine received the first tranche of the new program in the amount of $5 billion on March 13, 2015; the second tranche of $1.7 billion – on August 4, 2015.
At the moment, there is an ongoing second revision of the program. Ukraine and the IMF are discussing discuss a wide range of issues within the framework of the second revision of the cooperation program, which includes various aspects of monetary, banking, anti-corruption policy, pension reform, and privatization. The result of the revision must be approved by a memorandum between the government and the Board of Directors of the IMF.
Approval of the memorandum would mean granting Ukraine the third tranche from the IMF in the amount of $1.7 billion. Getting the third tranche of the loan is essential for Ukraine as a positive decision of the IMF will allow the country to bring an additional $2.3 billion in financial aid and $1 billion in loan guarantees from the U.S. Government, as well as loans from the European Union and the World Bank.
