IMF loan program to grant Ukraine $900 million in 1996 (05/19/96)

IMF loan program to grant Ukraine $900 million in 1996

by Marta Kolomayets
Kyiv Press Bureau

KYIV - The International Monetary Fund has resumed implementation of its stand-by loan program for Ukraine, voting in Washington on May 10 to grant Ukraine nearly $900 million in 1996, reported Interfax-Ukraine.

The fourth tranche of the $1.5 billion IMF stand-by loan signed last year - $100 million - is scheduled to be disbursed later this month, and the Ukrainian government is also likely to get the fifth stand-by tranche (worth another $100 million) by the end of May, according to IMF Executive Director J. de Beaufort Wijnholds, who met with National Bank Governor Viktor Yushchenko and Deputy Prime Minister for the Economy Roman Shpek in Kyiv last week.

According to the IMF's representative in Ukraine, Alex Sundakov, before the end of 1996 the IMF intends to disburse nine closely monitored monthly loan installments of about $100 million each. The IMF had suspended implementation of the program in April, when a number of guidelines had not been met regarding the budget deficit.

However, after receiving a memorandum on economic policy for 1996 from the Ukrainian government, which included promises of keeping the inflation rate down to 1-2 percent by the end of the year, speeding up the process of privatization, and keeping to the 6.2 percent budget deficit for 1996, the loan program was reviewed by the IMF.

The May 10 decision by the IMF board of directors in Washington marks the first time Ukraine has received foreign funds in 1996. And Ukraine needs these monies if it is to cover its huge foreign debt - largely for Russian energy imports - this year.

The decision to grant the stand-by credit was reached in April of 1995, of which Ukraine received over $760 million last year.

During his recent visit to Kyiv, Mr. Wijnholds consulted with members of the Ukrainian government, not only regarding the stand-by credit, but also the next IMF program in Ukraine.

According to the IMF, Ukraine may receive more than $2 billion (U.S.) in foreign aid from international institutions in order to implement economic reforms in 1996, reported Interfax-Ukraine.

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