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IMF planning to adjust Ukraine’s economic policy

Posted by the Editor on October 31, 2011

News / 31 October 2011 | 15:41

IMF planning to adjust Ukraine's economic policy

IMF planning to adjust Ukraine’s economic policy

The purpose of an International Monetary Fund mission’s visit to Ukraine is to adjust the country’s economic policy in accordance with the challenges of time. IMF Mission Chief for Ukraine Thanos Arvanitis announced this at a meeting with Ukrainian Finance Minister Fedir Yaroshenko, UKRINFORM reported citing the press service of the Ukrainian Finance Ministry.

Arvanitis also noted that during the IMF mission’s visit to Ukraine, which will last until November 4, the sides would discuss the implementation of the state budget in 2011 and the main figures of the draft budget for 2012.

On October 28, Ukrainian Prime Minister Mykola Azarov said that the government and the National Bank of Ukraine had fulfilled almost all of the targets as part of the implementation of a memorandum with the International Monetary Fund.

“We are fulfilling the main and most difficult point – the deficit of the consolidated budget and the deficit of Naftogaz,” he said.

As reported, an IMF mission arrived in Ukraine on October 25, 2011 and began to study the implementation of a previously agreed program of cooperation. In September 2011, IMF Resident Representative in Ukraine Max Alier announced the list of requirements that must be fulfilled by Ukraine to get a new tranche from the IMF.

They include the holding of pension reform, the adjustment of gas tariffs for households and heat suppliers, and the search of funds to cover the deficit of Naftogaz of Ukraine. Another demand by the fund, which was met in June, was the cancellation of the mandatory redemption by the National Bank of Ukraine of bonds in banks’ capital.

In January-September 2011, Kyiv lost the opportunity to obtain three quarterly tranches of about USD 1.5 billion each from the IMF under the Stand-By Arrangement totaling USD 15.5 billion due to the violations of the terms of conducting pension reform, which were agreed with the IMF (pension reform was launched on October 1), and due to the failure to raise gas prices.

The government still hopes to reach agreement with the mission on the last point, citing as an argument “ending” talks with Russia on a reduction in the price of gas.


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