The Board of Executive Directors of the International Monetary Fund (IMF) approved emergency financial support for Ukraine in the amount of $1.4 billion. The funds were allocated under the Rapid Financing Instrument (RFI).
"This disbursement under the RFI, equivalent to 50 percent of Ukraine’s quota in the IMF, will help meet urgent balance of payment needs arising from the impacts of the ongoing war and will provide critical support in the short term while playing a catalytic role for financing from other partners," is stated in the Fund’s press release.
It is also reported that Ukraine canceled the current IMF Stand-by financing program and announced its intention to cooperate with the Fund to design a new economic program. It is aimed at rehabilitation and growth when conditions permit.
Note that the financial terms and conditions of the RFI are similar to the Stand-by terms and conditions, the funds received must be paid in 3 to 5 years.
"The Russian military invasion of Ukraine has been responsible for a massive humanitarian and economic crisis. The tragic loss of life, refugee flows, and immense destruction of infrastructure and productive capacity is causing severe human suffering and will lead to a deep recession this year. Financing needs are large, urgent, and could rise significantly as the war continues," the release quotes the words of Kristalina Georgieva, Managing Director of the Fund.
According to her, the reaction of the Ukrainian authorities to the emergency "was remarkable." Fiscal policy was focused on ensuring priority payments. Ukraine fulfilled all debt obligations.
The previous day, Georgieva stated that the IMF had shifted the focus in discussions with the Ukrainian authorities from reform to crisis management.