Photo by Ibrahim Boran on Unsplash

In ten days, on November 22, IMF will decide whether or not to give Ukraine another tranche of the fabled IMF loan.

In ten days time, the International Monetary Fund will decide whether or not to grant Ukraine another tranche of the five billion USD loan, that Ukraine was promised last Summer, reports Interfax-Ukraine. The Executive Board of IMF will consider the first review of the stand-by agreement and the allocation of the second tranche.

It has been in the works for more than a year. In June 2020, Ukraine received the first tranche of 2.1 billion USD, but since then the relationship between IMF and the Ukrainian leadership has been on rocky ground. Ukraine was setting down the right path to begin with and fulfilled their obligations to IMF by adopting a banking reform and a land reform.

However, after these two reforms, the process hit a standstill. When the money was paid out to Ukraine, the leadership promised to maintain the independence of the National Bank of Ukraine, NBU, but after a short while, previous governor of NBU, Yakiv Smolii, resigned from his position.

He cited political pressure from the office of President Volodymyr Zelenskiy as the main reason for him leaving, and since then there has been serious doubts about the independence of NBU. Especially because Zelenskiy started talking about what the exchange rate between dollars and hryvnias should be, leading people to think that he had ambitions to change the monetary policies of Ukraine.

Nothing so eventful ever happened though. A new head of the NBU was found quickly, and over the course of a year, he gradually changed the management board. Though this was never really seen in the policies of NBU, it all culminated this year, when several department heads left the bank, saying professional standards were not upheld.

This is but one of the issues. Ukraine has gone against the recommendations of IMF several times. It happened, for example, when they started airing the idea of introducing stronger price control on utilities like gas and electricity, an idea that made not just IMF but several ambassadors and international partners nervous.

The two parties have made up in some way though, and now there is a real possibility, that Ukraine will receive the next tranche of the loan, though it is uncertain what strings will be attached to the money and the central question: How much money will Ukraine receive from the second tranche?

We will find out on Monday, November 22. The relevant information will be posted on the website of IMF, and Ukraine Nu will naturally revisit this subject again.