Page 19 - RusRPTApr20

In March, the IMF announced the creation of the RFI, which can provide interest-free assistance to countries that have suffered from coronavirus, up to a total volume of $1tn. One of the first countries to ask for such assistance was Iran, which has not had an IMF deal for more than two generations. Zelenskiy asked the government to launch negotiations with the IMF for RFI funds on March 16.
A basic agreement has already been reached between the government and the IMF to allocate funds and currently only technical issues are being discussed, according to Ukrainian News.
At the same time, in parallel talks the Ukraianian side is asking for the size of the EFF programme to be increased from $5.5bn to $7bn.
The IMF is not charging interest on the RFI funds, nor is it attaching any string other than the insistence that the EFF deal be done first, which will be approved by a fast-track process (no adjustments to budget indicators, which will change and contravene the previous agreements). The size of the state budget deficit this year is expected to rise from the anticipated 2% of GDP to 4%.
Getting the EFF across the finish line remains the main challenge, and the IMF has made it clear that the passage of the banking law is a must for any deal to go ahead.
If the deal is done and approved then the size of the first tranche of the proceeds of finance will be important. Ukraine expects to receive a total of $3bn, of which $2bn will be from the EFF and $1bn from the RFI.
The RFI money will go to cover the budget deficit, as it is unclear if the money from the EFF can be used to support budget spending, which is not normal practice for the IMF.
2.7 Fitch slashes oil price forecast for 2020 by $20 to $41
Fitch Ratings has cut its short- and medium-term oil and natural gas price assumptions in expectation of very large market oversupply in 2020.
The agency cut its outlook for average prices for the Brent blend for 2020 from $62.5 per barrel to $41/bbl and its 2021 forecasts from $60/bbl to $48/bbl respectively.
“We assume the market will gradually rebalance in the next two to three years, but we have also trimmed our long-term assumptions to reflect continued efficiency gains, low break-even oil prices of many greenfield projects and a potential for demand to slow due to energy transition,” Fitch said in a note to subscribers.
Some economists are predicting the series of “stop shocks” following the crash of oil prices in March and exacerbated by the coronavirus (COVID-19) pandemic will tip the planet into a global recession of -0.5% this year, although there is still no consensus on just how bad things will get.
19 RUSSIA Country Report April 2020 www.intellinews.com