Ukraine, IMF agree on $15.6 billion loan package

The IMF and Ukraine have agreed on a new loan package to support the government’s finances severely strained due to the Russia-Ukraine war and at leveraging even more support by reassuring allies that Ukraine is pursuing strong economic policies.

Ukraine and the International Monetary Fund have agreed on a $15.6 billion loan package aimed at shoring up government finances severely strained by Russia's invasion and at leveraging even more support by reassuring allies that Ukraine is pursuing strong economic policies.

Ukraine’s Finance Ministry said on March 22 that the program will “help to mobilise financing from Ukraine’s international partners, as well as to maintain macro-financial stability and ensure the path to post-war reconstruction after Ukrainian victory in the war against the aggressor”.

The loan program will run for four years, with the first 12 to 18 months focusing on helping Ukraine close its massive budget deficit and alleviating pressure to finance spending through printing money at the Central bank, the IMF said in a statement Tuesday.

The remainder of the program will focus on supporting Ukraine's bid for European Union membership and post-war reconstruction.

The IMF deal is expected to leverage even more money for Ukraine since it provides evidence to potential donor governments, including in the Group of Seven democracies and the European Union, that Ukraine's government is following sound economic policies.

The agreement, which still needs approval from the IMF's executive board, “is expected to help mobilise large-scale concessional financing from Ukraine’s international donors and partners over the duration of the program,” Gavin Gray, the IMF"s mission chief for Ukraine, said in a statement.

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