The International Monetary Fund (IMF) has launched consultations with Ukrainian authorities regarding the combined second and third reviews of the Extended Fund Facility (EFF) program. This was reported to RBC-Ukraine by the IMF resident representative office in Ukraine. Following this combined stage, Ukraine could receive two tranches totaling about 1.65 billion dollars, making the current negotiations a crucial link in Kyiv's further cooperation chain with the Fund under the ongoing financing program.
Launch of the Mission and Its Composition
Consultations with the Ukrainian side started on November 9, as announced by IMF Resident Representative in Ukraine Prishila Tofano. The Fund's mission in Kyiv is headed by Gavin Gray. The combined review format means that instead of two separate verification cycles, the Fund is assessing the implementation of conditions for two stages of the EFF program simultaneously, which accelerates decision-making on fund disbursement and reduces the number of intermediate procedures.
Focus of Negotiations: Macroeconomics, Fiscal Policy, and Reforms
The main focus during the consultations will be on the macroeconomic and fiscal policy goals that the Ukrainian authorities aim to achieve. Representatives of the Fund and the government will also discuss the progress of structural reforms. It is these areas that determine how well Ukraine is fulfilling its obligations under the program and whether it is ready to move to the next financing stage.
What is at Stake: Two Tranches Worth $1.65 Billion
We are talking about combining the second and third reviews of the EFF program, following which Ukraine can receive two tranches totaling approximately 1.65 billion dollars. The results of the current review will be of direct importance for Ukraine's further cooperation with the IMF under the active financing program: a positive mission conclusion paves the way for funds transfer, while identified remarks may require additional adjustments from the government.
Conditions Set by the Fund in October
In October, the IMF outlined conditions for Ukraine's further financing. To receive the next tranches, Kyiv must continue reforms in revenue mobilization and public administration, as well as obtain financial support guarantees from international partners. Thus, the current November negotiations logically continue the line set by the Fund a month earlier and check whether these conditions have been met or are in the implementation stage.
Context: First Tranche Already Disbursed
A reminder of the program's dynamics is important for understanding the scale: in July, the Fund already disbursed about 690 million dollars to Ukraine following the first program review. Thus, the combined second and third review, following which about 1.65 billion dollars is expected, will become the next major financing stage and will allow assessing the sustainability of Ukraine's macroeconomic trajectory against the backdrop of ongoing structural transformations.
