Updated IMF EFF arrangement for Ukraine has 10 new structural benchmarks

MOSCOW. Oct 21 (Interfax) - The International Monetary Fund (IMF) has published an updated economic and financial policy memorandum upon completion of the fifth review of the Extended Fund Facility (EFF) arrangement for Ukraine with ten new structural benchmarks to be met between late October 2024 and late June 2025.

Six benchmarks concern structural fiscal adjustments, two apply to management, and one to the financial sector and the energy sector, respectively, Ukrainian media said.

In particular, chief financial and operational risks to financial stability under various scenarios are due to be assessed and contingency plans for the financial sector are due to be drafted by the end of this October.

In terms of management and the energy sector, the Accounting Chamber reform adjustments is due to be approved, the Ukrenergo Supervisory Board is due to be completed with a majority of independent members, and functional independence of the National Energy and Utilities Regulatory Commission is due to be ensured by amendments exempting the energy regulator's decision from state registration by the end of this year.

Concerning the financial sector, it is planned to approve amendments to the Budget Code by the end of January consistent with the Action Plan for Public Investment Management (PIM), and to appoint a new head of the Economic Security Bureau and approve the methodological framework underlying the PIM process by the end of February.

Amendments introducing tax reporting requirements for digital platform operators are due to be submitted to the parliament by the end of June, and the permanent head of the State Customs Service is due to be appointed, and the budget declaration for 2026-2028 consistent with the arrangement parameters is due to be presented by the end of June.

In addition, it was decided in the course of the review to postpone the achievement of two earlier benchmarks, i.e. amending the Criminal Procedure Code in terms of expiration dates of pre-trial investigation periods until the end of December 2024 and auditing of the National Anti-Corruption Bureau until the end of February 2025, instead of the end of September 2024.

As reported, the IMF Board of Directors approved on October 18 the fifth review of the Extended Fund Facility (EFF) arrangement for Ukraine, which is expected to result in the disbursement of a sixth tranche of $1.1 billion (SDR834.9 mln) to support the budget.

The four-year EFF arrangement totaling about $15.6 billion was approved on March 31, 2023. It was announced as part of the international support package for Ukraine in the amount of $115 billion, which later grew to $122 billion under the baseline scenario.

The first tranche of $2.7 billion was allocated in early April, the second, third and fourth in the amount of SDR664 million (about $880-890 million at the then exchange rate) followed in early July and mid-December 2023, as well as at the end of March 2024. Ukraine received the fifth tranche of SDR1.66 billion ($2.2 billion) in early July following the fourth review of the program. The overall funding under the IMF facility will total $8.7 billion.