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The government expects to use $2.7 billion from the IMF to increase social benefits

Author
Olga Krotovska

A non-repayable tranche of $2.7 billion from the International Monetary Fund will be used to increase social benefits. Financial assistance from the IMF will also contribute to macroeconomic stability in the country, Prime Minister Denys Shmyhal stated.

"This week Ukraine received more than $2.7 billion in non-repayable aid from the International Monetary Fund. These funds are part of the distribution in support of the IMF member countries in the recovery of the economy from the pandemic negative consequences. The received financial assistance will contribute to macroeconomic stability, as well as provide an opportunity to increase social benefits to citizens," the Prime Minister said.

Context. On August 2 of this year, The IMF Board of Governors approved a $650 billion distribution of SDR (Special Drawing Rights) between countries to help recover the global economy affected by the coronavirus pandemic. This is the largest SDR distribution in the history of the fund.

The funds were transferred to the accounts of Ukraine on August 23, 2021.

The Ministry of Finance said that they can use the tranche from the IMF to finance the budget or save it to finance the budget in the next budget periods.

On June 9, 2020, the IMF Board of Directors approved the Stand-by program for Ukraine for 18 months, with total funding of $5 billion. On June 12, Ukraine received the first and currently the only tranche of $2.1 billion. At the end of February 2021, the international rating agency Fitch Ratings predicted that in 2021 the IMF will provide Ukraine with only one credit tranche in the amount of $0.7 billion.

"We don’t need the IMF to go through this year," Hetmantsev told where Ukraine will get the money in case of negotiations failure

An IMF mission is expected to come to Ukraine in September to discuss Ukraine's progress on reform.

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