The allocation of money to Ukraine has disappeared from the meeting agenda of the executive board of the International Monetary Fund, the fund’s website shows. The provision of the next tranche had been scheduled for March 20.
The IMF issued a press release regarding the postponement of the session, saying: “A short delay is necessary to assess the developments and policy measures affecting the financial sector and wider economic prospects”.
The Ukrainski Novyny news agency, citing a source in the organizations responsible for collaboration with the IMF, writes that the transport blockade of the Donbas was the reason for the delay.
“Due to the necessity to further examine the influence of the blockade on the predictive macroeconomic indicators of the future development of the economy,” the agency’s correspondent said, speaking of the reason for the cancellation of the session.
The Ministry of Finance of Ukraine published on its site that the IMF executive board has temporarily postponed the examination of the third revision of the program to increase the funding for Ukraine, previously scheduled for March 20.
The department specified that the session’s postponement was caused exclusively by the need to update calculations on the economic consequences of the action taken by Ukraine in response to the blockade and the capture of Ukrainian companies in the uncontrolled territories of the Donetsk and Luhansk regions, as well as Russian recognition of documents issued by these territories.
“These calculations are important for both sides to ensure the maximal efficiency of the program. Relevant consultations have already been started. We plan to complete them as soon as possible,” Minister of Finances Oleksandr Danylyuk noted.
The NBU (National Bank of Ukraine) press service reported that on March 20 the regulator would review the macroeconomic forecast for the IMF, taking into account the effect of the blockade of trade with the separate Donetsk and Luhansk regions.
In March 2015 the IMF unveiled the four year EFF (Extended Fund Facility) program for Ukraine, amounting to $17 billion. It proposed that a quarterly program review be held, and that four tranches be allocated to Kyiv in 2015, and another four in 2016. However, thus far the country has received only three tranches: the first for $5 billion in March 2015, the second for $1,7 billion in August 2015, and the third for $1 billion in September 2016.
The allocation of the fourth tranche was delayed due to the ongoing coordination of the reforms which Ukraine must carry out. In particular, among Ukraine’s obligations are a pension reform, and the introduction of the land market.