According to the International Monetary Fund (IMF), a staff-level agreement on funding for Ukraine in the amount of $15.6 billion (£12.8 billion) has been reached.
In the coming weeks, the organization is likely to give its first loan to a nation that is currently engaged in armed conflict.
Also, it would be one of the most significant financial aid packages that Ukraine has gotten since the invasion by Russia.
Recently, the International Monetary Fund (IMF) amended a guideline to make it possible for nations suffering “exceptionally high uncertainty” to receive loans.
“The economic effects of Russia’s invasion in Ukraine continue to be catastrophic,” Gavin Gray, a representative of the International Monetary Fund (IMF), stated in a statement. “Activity declined by 30% in 2022, a significant portion of the capital stock was destroyed, and poverty levels increased,” the official added.
The program has been created in accordance with the new fund’s policy on lending amid extraordinarily high uncertainty, and significant financial assurances are expected from donors, particularly those from the G7 and the EU.”
Mr. Gray also stated that the agreement would “mobilise large-scale concessional finance” for Ukraine from foreign donors and partners; however, he did not provide any further details about this aspect of his statement.
This year, the International Monetary Fund anticipates that the Ukrainian economy will either see a modest expansion or a slight recession.
According to statements made by Ukrainian Prime Minister Denys Shmyhal, receiving the funds would assist the nation in “financing all important expenditures and ensuring macroeconomic stability and strengthening our cooperation with other international partners.”
On her unannounced trip to Ukraine last month, the Secretary of the United States Treasury, Janet Yellen, made the following statement when she was there: “An ambitious and adequately conditioned IMF program is vital to sustain Ukraine’s reform efforts.”
The United States is the country that contributes the most money to Ukraine and is the largest shareholder of the International Monetary Fund (IMF).
At the beginning of this year, Vice President Joe Biden made an announcement that the United States would be increasing its military assistance to Ukraine by roughly half a billion dollars. This was in addition to the $112 billion that Congress spent in 2022 on its own.
More than half of the money that the United States spends on Ukraine is allocated to military assistance. This money is used to purchase things like drones, tanks, missiles, and other ordnance systems. It also pays for training, logistical, and intelligence support.
Since Russia invaded Ukraine in February of last year, financial support has been coming in from all over the world. This continues to fuel the conflict.
The International Monetary Fund (IMF) announced a week ago that its executive board had adopted a rule modification that would make it possible for nations experiencing “exceptionally high uncertainty” to receive money.
It was stated that the measure applied to countries that were experiencing “exogenous shocks that are beyond the control of country authorities and the reach of their economic policies.” Yet, Ukraine was not specifically mentioned in the document.