Economist explains IMF credit policy in regard to Ukraine
There will be a continued depreciation of the national currency in Ukraine, and the exchange rate may reach 30-35 UAH to the US dollar, as stated by economist, Elena Slezko, in her commentary for GolosUA. She also stated that the International Monetary Fund (IMF) plays a considerable role in this situation.
“Everything depends on the government’s actions and how long the IMF will delay the next tranche as we are very dependent on that money,” she noted. “All developing economies use a number of votes when approving credits for a country. However, the USA controls 30% of this,” Slezko emphasized.
She also said that the stand-by credit comprises four parts: the first tranche can be received unconditionally, the second tranche can be received under certain conditions and the third tranche can be received under very tough requirements.
“This is the third tranche for us and the fourth since independence. We terminated cooperation with the IMF at the third tranche as conditions under former presidents Leonid Kuchma and Viktor Yushchenko were unbearable and inconsistent with the country’s development,” Slezko explained.
She also reported that Ukraine is currently repaying loans taken in 1996.
“Interest amounts were spread over many years and it is not favourable for the IMF for the country to terminate crediting. Only a few countries are able to meet the IMF requirements. Now, they strongly influence the Ukrainian hryvnia’s exchange rate,” Slezko concluded.