IMF mission leaves: clarity on Privatbank requested

UKRAINE - In Brief 27 Sep 2019 by Dmytro Boyarchuk
Yesterday, on Sept 26 the IMF mission concluded its technical visit to Ukraine. Media immediately claimed that a ‘no-agreement’ leave is a bad sign. Today there was released a statement, which mentions “…the importance of central bank independence and safeguarding financial stability, as well as the need to make every effort to minimize the fiscal costs of bank resolutions”. The IMF made it clear there will be no deal until there is clear view on Privatbank’s fate. Nothing new but the IMF had to spell it out publicly. Now Ukrainian authorities will have few weeks to consider thoroughly and give a response on the raised questions. In base-case scenario – the response will be correct and satisfactory for the IMF. However, I need to mention that voices with ‘alternative opinion’ now sound more loudly. People see foreign currency inflowing to the country and the hryvnia strengthening. For many it’s an evidence that we can walk through without the IMF. And some influential opinion makers (sympathetic to Kolomoyskiy) started pushing an idea that Ukraine is already strong enough to consider its own interest and there is no need to follow the IMF advises blindly. Luckily, Premier looks committed to find a deal with Fund.

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