IMF Approves Monitoring Program To Help Ukraine Secure Donor Funding

The International Monetary Fund (IMF) approved an economic monitoring program for Ukraine on Monday, which might help Kyiv receive donor assistance, since the war-torn country need more than $40 billion this year.

According to an IMF statement, the monitoring program is intended to help Ukraine maintain stability and stimulate donor financing amid very substantial balance of payment needs and exceptionally high risks resulting from the Russian invasion.

According to the IMF, Ukrainian authorities are dedicated to economic and financial reforms, specifically revenue collection, the domestic debt market, transparency, and the independence of the central bank.

According to the statement, they have four months to demonstrate their progress under the Program Monitoring with Board Involvement (PMB) program.

The IMF-monitored framework of actions intends to prepare the way for finance, which can “come from many sources,” according to Gavin Gray, the IMF’s head of mission in Ukraine.

Gray estimated that Ukraine will require between $40 billion and $57 billion to satisfy its budgetary and operations demands in 2023.

Following the IMF’s suggestions will “igive the donors the confidence to provide resources,” he said.

Russia’s invasion “continues to have a devastating social and economic impact on Ukraine,” with mounting civilian casualties and a third of the population displaced, IMF First Deputy Managing Director Gita Gopinath said in a statement.

“Notwithstanding all these strains, the authorities have largely managed to maintain macroeconomic and financial stability, and they are committed to continue adapting policies to fast-changing circumstances, including in the case of a severe downside scenario,” Gopinath said.

“Large and predictable external financial support will be critical for the success of the authorities’ strategy, and front-loaded disbursements would help address strains in early 2023,” she said.

If Ukraine follows the monitoring program well, it “should assist pave the road toward a possible full-fledged IMF-supported program,” she said.

Gray underlined that it was “too early” to speculate on the size of the IMF program.

Since the beginning of Russia’s invasion of Ukraine in February, the IMF has allocated $2.7 billion in emergency aid to Kyiv.

The European Commission has just proposed loans worth 18 billion euros ($19 billion) in 2023.