Ukraine rushing IMF with stand-by loan provision

Ukraine has asked the International Monetary Fund (IMF) to review its schedule of stand-by loan disbursements by merging the third and fourth tranches, with the possibility of receiving both before the end of 2014, said Finance Minister Oleksandr Shlapak.

Ukraine has asked the International Monetary Fund (IMF) to review its schedule of stand-by loan disbursements by merging the third and fourth tranches, with the possibility of receiving both before the end of 2014, said Finance Minister Oleksandr Shlapak.

"We want to merge the third and fourth tranches. We expect it to be around $2.2 billion. And we expect to receive them before the end of the year," he told journalists in Kiev on Wednesday.

He said that $1 billion of the second $1.4 billion tranche, a decision on which is expected at the end of August, will go to the budget and the remaining $0.4 billion, to the National Bank.

It was reported that on April 30 the IMF board of directors approved a stand-by loan program for Ukraine at SDR 10.976 ($16.76 billion at the current exchange rate) and immediately allocated the first tranche in the amount of SDR 2.058, of which SDR 1.29 billion were granted to finance the budget deficit.

Initially, the second, third and fourth tranches were scheduled for July 25, September 25 and December 15, 2014, respectively, in an amount of SDR 914.7 million (around $1.4 billion) each, while the fifth, sixth, seventh and eighth quarterly tranches in 2015, at SDR 1.372 billion each. The final, ninth tranche under the program - at SDR 686 million - is to be disbursed in mid-March 2016, provided all terms and conditions have been met.

The IMF mission was in Ukraine on June 24 - July 18 for a first program review. The review focused on adjusting the 2014 macroeconomic forecast and national budget, including in light of the events in the Donetsk and Luhansk regions.

On August 29 the IMF directors will consider allocation of the second tranche to Ukraine and Kyiv\'s request to change the performance criteria and review the disbursement schedule.

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