IMF approves $880 million loan tranche for Ukraine, expecting war to end this year

(Patria) - The Executive Board of the International Monetary Fund has approved the third review of Ukraine's $15.6 billion loan program, enabling the release of $880 million for budget support and increasing total disbursements to $5.4 billion, the IMF said.

The IMF said on Thursday that the risks Ukraine faces remain exceptionally high,
particularly uncertainties surrounding the war with Russia and prospects for external financing, although the head of the Ukrainian mission, Gavin Grey, told reporters that the fund still expects the war in Ukraine to subside by the end of 2024, Reuters reports.

Grey said Ukraine's overall performance under the IMF program remained strong during the first year and that it had met all but one of the quantitative performance criteria. The miss involved tax revenues, but it was a very small amount.

Ukraine should receive the funds in the coming days, Grey said. This should be
welcome news as the U.S. Congress continues to debate approval of an additional $61 billion aid package for Ukraine. Grey said the IMF will need to study the impact on Ukraine's debt levels if U.S. lawmakers decide to convert part of those funds into a loan instead of a grant. Sanaa Nadeem, deputy head of the IMF mission for Ukraine, said the IMF had approved a new debt sustainability analysis for Ukraine that did not significantly change the macroeconomic analysis but excluded about $3 billion in debt for Russian eurobonds that Ukrainian authorities have contested.

She said credible progress had been made in restructuring Ukraine's commercial debt and that the IMF expects technical talks on this to begin in the coming weeks.