New stand-by arrangement

UKRAINE - In Brief 20 Oct 2018 by Dmytro Boyarchuk
Immediately after gas prices’ increase the IMF reported about staff level agreement on a new 14-month Stand-By Arrangement (SBA). The new program opens access to near $3.9 billion loan. Approval of a government budget for 2019 consistent with IMF staff recommendations is a precondition to have the program approved by the IMF Executive Board. The IMF press-release does not state it explicitly but it looks like the final wire of $1.9 billion under EFF program (that everyone expected) will not take place. New tranche will be already under new SBA. Nevertheless new program sounds much more encouraging than just one final payment and ‘lonely walk’ through the elections’ year. A big question which kind of priority actions we will have under new SBA. The Groysman Cabinet theoretically will stay in place till the end of parliament elections (parliament appoints major part of the government). However, if we have new President with old Premier – the Cabinet might become malfunctional. Still new SBA is a strong positive signal which opens the way for EUR 1 billion EU loan under Macro-Financial Assistance, $0.8 billion loan from the World Bank, and Eurobonds' placements. Acting Finance Minister Oksana Markarova stated that new Eurobonds will be placed already over the upcoming months till the end of 2018.

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