Photo by Ibrahim Boran on Unsplash

Ukraine wants to extend the 18-month stand-by arrangement (SBA) with IMF for six months.

The Ukrainian Finance Ministry has suggested that the current 18-month SBA with the International Monetary Fund is extended with 6 months, said the Finance Minister Serhiy Marchenko, according to Ukrinform.

“It is being discussed, but there is no final decision yet. That is, the stand-by program could be extended for six months. But it is too early to talk about such an extension,” Marchenko said.

Naturally, IMF would have to agree to this and as of now they have not reached a decision. It is still expected that the IMF mission will return to Kyiv in September following a conversation between the President of Ukraine and IMF chief Kristalina Georgieva.

Uncertainty

In June last year, Ukraine was given the first 2.1 billion USD tranche of a 5 billion USD loan. In exchange for reforms, it was agreed that Ukraine should receive the rest at a later stage, but Ukraine never lived up to the expectations of the IMF, and hence the money was never paid out.

Shortly after the tranche was paid out, Governor of the National Bank of Ukraine, NBU, resigned citing political pressure. This raised serious questions about whether or not NBU was allowed to work as an independent institution, which was one of the few requirements by the IMF.

Since then, the new management has replaced the entire board of managers with new people, and a lot of the department heads in IMF has left the bank because of what they see as a lag of institutional integrity.