Ukraine might be able to clinch one more tranche of aid from the International Monetary Fund this year, the deputy central bank governor said on Monday, although Kiev faces a tense period over the coming months due to high external debt repayments.
The $3.9 billion standby programme with the IMF, which runs until 2020, is on hold until a government is in place in Kiev following July's snap parliamentary election. President Volodymyr Zelenskiy dissolved parliament and called the poll after sweeping to victory in an election in April. "If the government is formed and ... picks up (the reins) again in September, then we have a chance of getting another tranche of some description by the end of the year -- that's what we consider the dream scenario," deputy governor Kateryna Rozhkova told Reuters. She said she expected any further disbursement to be of similar size to previous tranches, at around $1.3 billion.
Ukraine has received $1.4 billion from its latest IMF programme so far, and the country's central bank chief said in April he expected two tranches to be disbursed in 2019. The IMF has supported Ukraine's war-scarred economy with several aid-for-reforms programmes since Russia's annexation of Crimea in 2014 and the outbreak of a Kremlin-backed separatist conflict in eastern Ukraine.
While Ukraine's macroeconomic and financial space was "fairly stable", 2019 would present challenges, Rozhkova added in an interview ahead of an investment conference. "We do have some quite substantial debt repayments by the end of this year and next year as well, undoubtedly it will be a very tense period ... It is obvious that 2019 is a difficult year for us," she said, speaking through a translator. "The IMF is key for us -- and not just the one tranche."
While Ukraine's current foreign currency reserves were sufficient, projections would have to be adjusted to take into account the hiatus in IMF engagement and associated financing, Rozhkova said. "Our reserves are over $19 billion, and continued IMF cooperation would help us to get to over $21 billion," she said, giving no time frame but saying the central bank had added about $1.1 billion more through open market operations to enhance reserves.
Ukraine started investor meetings on Monday to sell a seven-year euro-denominated Eurobond.
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