Local media rumors on 6-month IMF program extension, potential program conditionality
Ukraine seeks to extend its current 18-month $5.0bn Stand-By Arrangement (SBA) with the IMF by six months, until mid-2022, the local news site lb.ua wrote on Friday, citing unidentified sources. The article said that the government’s recent decision on temporary gas price regulation would make it difficult to reach a staff-level agreement with the ongoing IMF mission, which is expected to finalize its work this week, possibly as early as today. Removing the gas tariff cap would become one of the prior actions for the IMF Board’s approval of the next loan tranche expected at $0.7bn, along with steps on the anticorruption front and judicial reform, namely introducing more severe punishment for illicit enrichment and resolving the Constitutional Court issue. Also, the program may include additional structural benchmarks, such as amendments to the NBU law curtailing the powers of the NBU Council and banning secondary purchases of government bonds, creation of the Fiscal Investigation Service, and effectiveness of the tax and customs services.