Financial aid to Ukraine in 2016 to be limited to IMF tranche, U.S. and EU loans – expert

Wednesday, May 11, 2016 - 17:01 (EEST) Section: Latest news

The situation on the Ukrainian interbank currency market will remain volatile, and the financial assistance to Ukraine from its official creditors this year will come in the form of the next bailout tranche under the IMF`s Extended Fund Facility (EFF) approved in March 2015 and related loans from the U.S. government and the European Union, chief economist at Dragon Capital Olena Belan has told UNIAN.
The expert predicts moderate growth of the central bank`s reserves to the level of $16 billion by the end of 2016, covering 4.1 months of imports.
According to Belan, international reserves of the National Bank of Ukraine (NBU) in January-April stayed roughly unchanged, as reciprocal transactions under earlier established swap lines, estimated at $1.3 billion, were offset by the NBU foreign currency purchases on the interbank market to the tune of $0.4 billion, net foreign currency borrowings in the amount of $0.6 billion, including coupon payments, as well as positive impact of $0.2 billion from revaluation reserves.
As UNIAN reported earlier, Ukraine`s international reserves as of May 1, 2016, amounted to $13.241 billion, which is higher by $519.5 million, or 4.1%, compared to April 1 ($12.722 billion), according to the NBU`s preliminary data.
The NBU forecasts that the volume of international reserves of Ukraine will be $18.7 billion by the end of the year, while the key factor of their growth is the resumption of cooperation with the IMF.
In 2015, Ukraine`s forex reserves increased by $5.767 billion, or 77%, to $13.3 billion.
A mission of the International Monetary Fund led by Ron van Rooden arrived in Kyiv on May 10, expected to continue its work through to May 18. IMF experts are to meet with Ukrainian officials, to focus on discussions and finalizations of the second review of the Fund`s EFF. The four-year EFF program worth about $17.5 billion originally foresaw quarterly reviews of the program, the disbursement of four tranches to Kyiv in 2015, another four in 2016. However, at present, the country has received only the first tranche worth $5 billion on March 13, 2015, and the second one worth $1.7 billion arrived on August 4, 2015.
According to the NBU estimates, the amount of undrawn balances under the existing program with the IMF will amount to $11 billion, as well as EUR 1.2 billion and $1 billion under related EU and U.S. loans, respectively.