The International Monetary Fund board has approved a new 48-month extended arrangement of about $15.6 billion for Ukraine, the fund said in a statement Friday.
The loan is part of a support package for Ukraine that totals $115 billion and allows for the immediate disbursement of around $2.7 billion.
“The overarching goals of the authorities’ program are to sustain economic and financial stability at a time of exceptionally high uncertainty, restore debt sustainability on a forward-looking basis in both a baseline and downside scenario, and promote reforms that support Ukraine’s recovery on the path toward EU accession in the post-war period,” according to the statement.
“The program, together with financing assurances from the G7, EU and other donors, is designed to solve Ukraine’s balance of payment problem and restore medium term external viability.”
Ukrainian President Volodymyr Zelensky thanked the IMF, including Managing Director Kristalina Georgieva, for approving the loan to Kyiv.
“Together we support the [Ukrainian] economy. And we are moving forward to victory,” he said in a tweet.
IMF First Deputy Managing Director Gita Gopinath complimented Ukrainian authorities for their work managing the country’s finances despite the “devastating economic and social impact” of Russia’s full-scale invasion.
“Activity contracted sharply last year, a large swathe of the country’s capital stock has been destroyed, and poverty is on the rise,” Gopinath said. “The authorities have nevertheless managed to maintain overall macroeconomic and financial stability, thanks to skillful policymaking and substantial external support.”
Gopinath admitted the risks of the program were “exceptionally high,” but she said Ukraine’s track record was a mitigating factor.
“The authorities’ track record of undertaking ambitious policies when warranted, their readiness to undertake contingency measures, and the frequent reviews in the first phase of the program are risk mitigating factors,” she said.
“The program has been appropriately designed to resolve Ukraine’s balance of payments problem and restore medium-term external viability in both a baseline and downside scenario.
