IMF LOANS On 30 April 2014, after the Revolution of Dignity, in order to support the new government the International Monetary Fund approved a new stand-by loan (SBA) for Ukraine amounting USD 16.5 bn. Under this program, Ukraine received two tranches amounting USD 3.2 bn on 7 May 2014, and USD 1.3 bn on 29 August 2014. On 11 March 2015, the IMF replaces the above standby program with the new four-year program “Extended Fund Facility” (EFF). The first tranche within EFF program amounting USD 5 bn was granted to Ukraine immediately upon approval of the program on 11 March 2015. The second tranche of USD 1.7 bn was approved by the Executive Board of the IMF on 31 July 2015. The third tranche of USD 1 bn was approved on 14 September 2016. On 9 June 2020, IMF approved new SBA amounting USD 5 bn. Both SBA and EFF required s Ukraine to implement comprehensive reforms in banking, budgeting, and anti-corruption spheres. All the tranches are preconditioned with a number of requirements set up in the respective memorandums of understanding between Ukraine and the IMF.
The IMF pays special attention to fulfilment of anti-corruption conditionalities, which are crucial to receive next tranches.
IMF memorandums contain anti-corruption conditionalities, which have different status and leverage, specifically:
- Commitment: a promise of the government to conduct a certain specific reform step.
- Benchmark: a promise of the government to conduct a certain specific reform step with a clearly set up deadline, which is being rigidly assessed by the IMF staff prior disbursing the next tranche.
- Prior action: a measure that a country agrees to take before the IMF’s Executive Board approves financing or completes a review. Prior actions ensure that the program has the necessary foundation to succeed, or is put back on track following deviations from agreed policies.
Often, the top-priority conditionalities undergo transition from the status of commitment towards the status of benchmark and then if not implemented to the status of a prior action.
IMF conducts regular review missions to Ukraine, within which IMF staff assesses the level of implementation of the reforms and sometimes updates commitments, benchmarks and prior actions.