World Bank Promises $ 650 Million Guarantees to Ukraine in Return for Reforms

The World Bank says it is preparing a $650 million guarantee to help Ukraine obtain funding in global-debt markets, but Kyiv must first comply with economic reforms demanded by the International Monetary Fund. In order to proceed with the proposed operation, it will be necessary to confirm the completion of all reforms and the adequacy of the macroeconomic framework, reports The World Bank on Facebook. IBRD guarantee is expected to help Ukraine raise about $800 million through a private transaction in the lending market. Also critical for the government is to reach agreement with the IMF on the fourth review of the program loan, without which the proposed operation will be unable to proceed, reads the post. The IMF representative said earlier that the mission of the Fund would visit Kyiv for talks with the Ukrainian authorities on September 6, who hopes to resume funding in the four-year program for a total amount of $ 17.5 billion suspended last year. Due to the delay in the reforms, Ukraine has not received IMF loans since April 2017. This, in turn, blocked the financial support of other international creditors and reduced Kyiv’s ability to attract resources on the international capital markets urgently needed for national debt payments over the next two years. Kyiv says that it has taken almost all the measures promised to the IMF, necessary to resume financing, in particular, passed laws on the anti-corruption court and privatization. The government hopes to reach a compromise with the fund on raising gas tariffs for the population, arguing that a sharp increase in prices to CIF parity will be too painful for the majority of citizens whose solvency has fallen many times amid high inflation and devaluation of the hryvnia exchange rate. The World Bank encourages the Ukrainian authorities to complete the pending reforms and reach an agreement on the IMF fourth review,” the bank stated. Source: Reuters