IMF Delays Ukraine Review to October; Seeks ‘Strong Policies’
The International Monetary Fund has postponed a visit to Ukraine planned for next week to October and said it is seeking “strong policies” from the government before resuming a $15.6 billion bailout program.
“I stressed the importance of strong policies and reforms to overcome delays,” David Lipton, special adviser to the IMF’s managing director, said in an e-mailed statement late yesterday after meeting Ukraine’s Finance Minister Fedir Yaroshenko and Coal and Energy Minister Yuriy Boyko in Washington.
The IMF has so far released $3.4 billion of the $15.6 billion loan, granted last July, in two tranches. The third, due in March, was delayed pending a revamp of Ukraine’s pension system and increases in household energy tariffs to lower the budget deficit.
An IMF mission had been due to visit Kiev, the former Soviet republic’s capital, Aug. 29 to Sept. 9 to review government policy, according to an Aug. 11 statement. Ukraine’s Deputy Prime Minister Serhiy Tigipko said June 22 that his country may receive $3 billion from the Washington-based lender next month.
“Although the Ukrainian parliament approved a pension reform bill in July, the president has not signed it yet,” said Olena Bilan, chief economist at Kiev-based Dragon Capital, in a note to clients today. “The IMF statement also implies the sides achieved little progress regarding an increase in domestic-gas tariffs, which is the other critical condition set forth by the fund.”
Following the delay, Ukraine won’t receive further disbursements from the IMF before mid-November, Bilan said.
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