Ukraine, IMF near $900M payment amid stalled US aid

Ukraine is near an agreement with the International Monetary Fund to get the next $900 million disbursement from its $15.6 billion loan, a boost to the nation’s war-ravaged budget and a vote of confidence as US aid remains elusive, reported from Bloomberg.

Ukraine expects to reach an agreement with IMF staff as soon as Thursday, according to officials with knowledge of the talks, who asked not to be identified as the deal hasn’t been finalized. The agreement would still need to be ratified by the fund’s executive board, a step deals like this almost always clear without issue.

The agreement follows discussions over the past two weeks over how Kyiv would be able to fund its operations in case US funding, which is tied up in Congress, doesn’t come through. Those plans — designed to show Ukraine can continue to service its debts — include expanded domestic bond sales, tax hikes and spending cuts.

If the US Congress fails to approve more than $60 billion in assistance to the country for this year, IMF’s funds will likely become the second-largest financial lifeline for Kyiv after EU’s grants and loans.

The IMF money comes as the war-torn nation struggles to mobilize resources to continue its resistance to Russia’s invasion into a third year.

The IMF staff team led by mission chief Gavin Gray, which has been assessing whether Ukraine met conditions to get the loan disbursement, is set to finish its work and make a statement on Thursday in Washington, the officials said. The staff-level agreement may still require some additional days to finalize after that, one of the officials said.

An IMF spokesperson said its team is in Warsaw now for talks with Ukrainian officials and will communicate at the end of mission, without providing further details. The Ukraine central bank’s press office said it couldn’t comment until the IMF’s mission is over, while the Finance Ministry declined to comment.

The disbursement would be the first of four that Ukraine expects this year, for a total of $5.4 billion, part of a full-scale program for Ukraine approved in 2023, the first time that the IMF has lent to a nation at war.

To receive the money, the government needs to meet conditions discussed with the IMF. Among other commitments, the cabinet may need to abandon its recent request for the central bank to allow the sale of foreign currency to some private Ukrainian firms to help them repay their eurobond debts, according to two of the officials. Pausing the payments helps Kyiv keep much-needed foreign exchange reserves.

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