The International Monetary Fund (IMF) has begun its latest review of Ukraine’s lending program amid delays in Kyiv’s legislative process for a key tax bill. On Monday, Ukraine’s Ministry of Finance announced the IMF delegation’s arrival in Kyiv to assess the possibility of releasing a $1.1 billion tranche as part of a four-year agreement. The Ministry identified four “structural benchmarks” that Ukraine must meet, including a financial risk assessment and a strategy for privatizing state-owned enterprises.
Priscilla Topano, the IMF’s resident representative in Ukraine, stated that the in-person review will conclude on November 18, but discussions will continue remotely. If the IMF verifies that Ukraine has met its commitments, the funds could be released in December. Since Russia’s invasion, the IMF has provided approximately $9.8 billion in loans to Ukraine, with the overall package, including pledged funds, exceeding $15 billion.
However, the IMF has raised concerns about Ukraine’s proposed tax reforms, deeming them insufficient and recommending a higher value-added tax (VAT). Last month, the Ukrainian parliament passed a tax increase, including a “military burden” on households and small businesses, though President Volodymyr Zelenskyy has yet to sign the bill into law.
Sources indicate that the IMF’s recent assessment highlighted disagreements with Ukraine’s central bank regarding currency depreciation and interest rate policies. Additionally, the IMF expressed concerns over the recent dismissal of Ukraine’s power grid operator’s CEO. The outcome of these discussions could impact the timing and conditions of further financial support for Ukraine.
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