Page 14 - UKRRptFeb19

2.6 IMF signs off on new $3.9bn SBA deal for Ukraine
The board of Ukraine’s main donor, the International Monetary Fund (IMF) signed off on the badly needed $3.9bn Stand by agreement (SBA) at a meeting on December 18.
The approval of the deal clears the way for the release of the next tranche of cash worth $1.4bn that Ukraine needs to clear its debt obligations for this year.
The agreement also means Ukraine will be able to faces a two-year debt
payment mountain of $17bn in 2019-2020 as the restructured debt
deal expires in the next two years, according to a report from the
National Bank of Ukraine (NBU) this week. There is some $3bn of debt
to repay this year, rising to $6bn in 2019 and $11bn in 2020 of external sovereign debt that comes due.
The new stand-by program is a downgrade from the previous $17.5bn Extended Fund Facility deal that runs over several years. The new agreement is shorter term and comes with more strings and was imposed due to constant foot-dragging on crucial reforms by the government.
Kyiv welcomed the decision. “Such decisions that come from leading world financial institutions ensure stability of our progress and strengthen resilience of Ukraine against severe internal and external challenges,” Poroshenko said on Facebook as cited by Bloomberg. “Keep walking on with confidence!”
The new tranche will top up Ukraine’s foreign-currency reserves, which are currently $17.7bn for almost exactly three months of import cover – the minimum economist believed is needed to ensure the stability of the national currency.
The new IMF deal means that Ukraine will now be able to get through 2019 financing needs comfortably, whereas with the IMF deal the country was facing a debt crisis.
14 UKRAINE Country Report February 2019 www.intellinews.com