[ad_1]
A massive resignation from the National Bank of Ukraine on Wednesday threatened to put another obstacle in the way of an IMF financing plan, raising concerns over Ukraine’s access to much-needed financing.
The funding in question is a $ 5 billion guarantee agreement that was agreed in June of last year. Of the total, $ 2.1 billion was disbursed last year. A tranche of $ 700 million, which was due to be disbursed by the end of 2020, has still not reached Ukraine, as the Fund continues to question the progress of Ukraine’s reforms.
The anti-corruption campaign was stalled earlier this year, pushing Ukraine further away from the funding it needs to help its economic recovery.
But progress on the reform front this week – in the form of new legislation passed around the judicial and banking sectors – had heightened hopes of gradually moving closer to securing that disbursement.
“This week is very productive in Parliament with progress on most of the projects discussed with our international partners,” said Yuriy Butsa, government commissioner for public debt management in Ukraine. “This shows that there is a clear political will to keep the current IMF program on track. In the near future, we expect Parliament to support the rest of the legislation necessary for progress in the next review. “
But as Edwin Gutierrez, Head of Emerging Markets Sovereign Debt at Aberdeen Standard Investments, says with Ukraine “there are always two steps forward and one step back with the Fund”.
On Wednesday, a large group of central bank licensing staff tendered their resignation, writing an open letter criticizing the bank’s management and the lack of transparency of the new governor, Kyrylo Shevchenko, in office since July of the last year. They mark the latest in a series of central bank departures since then.
INDEPENDENCE IN DOUBT
Evgeniya Akhtyrko, analyst at Concorde Capital in Kiev, believes that this is a “disappointing development that will send alarming signals to the IMF”. The resignations are likely to reignite questions about the independence of the central bank – another goal of the Fund.
Some, including Concorde Capital, are still hoping that the disbursement will reach Ukraine by September. If not, however, it is likely to be rolled over until next year, leaving Ukraine with limited funding options for the rest of its budget.
“There is no alternative to IMF financing,†says Artem Shevalev, EBRD board member for Ukraine. “The EBRD plays a role in the private sector, but it cannot influence change at the government level like the Fund Ukraine could issue Eurobonds, with the liquidity glut and the markets behaving like they do. have been recently, but it still won’t be cheap and certainly not cheaper than his last show.
[ad_2]
