What is the deal between the Ukrainian government and the IMF?

The government should agree with the IMF on a long-term, high-volume funding program. This definition fits the Extended Fund Facility (EFF) program, which provides exceptional access to the Fund’s resources.

“For example, a program for USD 20 billion with a longer repayment period and a larger amount than the EFF program but without exceptional access,” said Hlib Vyshlinsky, director of the Centre for Economic Strategy.

According to him, the problem with exceptional access (as for Argentina or Greece) is that it requires debt sustainability analysis. The expert said that this analysis is based on a medium-term macroeconomic forecast, which cannot be accurately made for Ukraine due to the unclear outcome of the war.

“The IMF program is needed primarily for purely financial reasons. Until the end of the war, Ukraine needs to finance USD 4-5 billion of its deficit every month, moreover, in foreign currency, in order to simultaneously close the balance of payments deficit and maintain the NBU’s foreign currency reserves,” Vyshlinsky said.

The article was published in Ukrainian.