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IMF approves providing new tranche of loan of $700 million to Ukraine—how funds will be spent on

The International Monetary Fund approved providing a tranche of a loan to Ukraine in the amount of $700 million. In addition, the IMF Executive Board agreed on extending the Stand-by agreement until early July 2022, according to the press service of the Fund.

Quote"The completion of the review allows the authorities to draw the equivalent of about $699 million, bringing total disbursements under the current SBA to about $2.8 billion," the report states.

President Volodymyr Zelenskyy thanked the IMF and noted that the government would steer the money obtained to "support the financial system and fight the consequences of COVID-19."

With the measures taken by Ukraine in terms of reforming the judicial system, continuing the reform in the financial sector, we have confirmed the status of Ukraine as a reliable and responsible partner. The IMF funds will be used to maintain the stability of the financial system and combat the consequences of COVID-19.

Denys Shmyhal

Denys Shmyhal

The Prime Minister of Ukraine

Context. In June 2020, the IMF approved a Stand-by program for Kyiv. Its total amount was approximately $5 billion, the first tranche was $2.1 billion. However, the mission subsequently halted funding because of Ukraine's failure to fulfill a number of obligations.

On October 18, it became known that Ukraine and the IMF reached a Staff-Level Agreement on revising the Stand-by program.

Recall: On August 24, Ukraine got 1.9 billion SDRs (Special Drawing Rights), or about $2.69 billion in equivalent from the International Monetary Fund.

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