IMF extends deadlines for three structural benchmarks in EFF program for Ukraine
MOSCOW. March 25 (Interfax) - The International Monetary Fund has published an updated memorandum on economic and financial policy following the third review of the Extended Fund Facility Arrangement for Ukraine.
Ukrainian media reported that the document does not contain any new structural benchmarks, while the deadlines for complying with three existing ones are extended for several months.
The deadline for the adoption of a law on rationalizing the consideration of cases by the High Anti-Corruption Court (HACC) with the possibility of such consideration by one judge instead of a panel of three judges has been extended for a month, until the end of April.
The implementation of a methodology for assessing supervisory risks to determine priorities for supervisory activities was delayed for six months until the end of December, and the development of a policy regarding state-owned enterprises, dividend policy and privatization strategy for two months, until the end of October this year.
Thus, in addition to the law listed above on the rationalization of the HACC work, the nearest structural benchmarks are the development of a concept note on the 5-7-9 program by the end of March with proposals for reorientation towards small and medium-sized enterprises by gradually abandoning the participation of large companies and strengthening monitoring and ensuring adequate guarantees and adoption of the law to reset the Economic Security Bureau by the end of June, respecting the existing distinction between its investigative powers and the powers of the National Anti-Corruption Bureau of Ukraine (NABU).
The permanent structural benchmark in relation to state-owned banks has also been changed, and now it allows for the continuation of the work of the First Investment Bank (PINBank), which became the state property by decision of HACC from sanctioned Russian businessman Yevgeny Giner and which state-owned Ukrposhta would like to receive.
"All systemic banks with majority state ownership will fall under the responsibility of the Ministry of Finance and any non-systemic banks that come under state ownership will not be recapitalized using fiscal resources and will be transferred to the Deposit Guarantee Fund (DGF) for resolution upon breach of prudential requirements," says the updated memorandum.
The IMF on Thursday agreed to disburse a third EFF tranche of $880 million to Ukraine following a third review of the program.
The four-year EFF totaling around $15.6 billion was approved on March 31, 2023, and is part of a $122 billion package of international support for Ukraine. The first tranche of $2.7 billion was disbursed in early April, and the second and third tranches of SDR664 million (about $881 million-$890 million at the then exchange rate) in early July and mid-December.
Another three tranches are envisaged for 2024, including SDR1.67 billion in mid-June, and SDR835 million each in early September and December.
Two tranches are planned for 2025: SDR684 million each will be released in early March and late August, followed by the three last tranches of SDR966 million each.