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Kiev Hopes to Secure $1.7Bln IMF Tranche After First Aid Program Review

© AFP 2023 / EMMANUEL DUNANDUkrainian Finance Minister Natalie Jaresko
Ukrainian Finance Minister Natalie Jaresko - Sputnik International
According to Ukrainian Finance Minister, Kiev hopes to receive another tranche of $1.7 billion under the International Monetary Fund’s Extended Fund Facility arrangement.

A man stands next to an advertising placard showing British pounds, US dollars and Ukrainian hryvnia banknotes in the Ukrainian capital Kiev - Sputnik International
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KIEV (Sputnik) Kiev hopes to receive another tranche of $1.7 billion under the International Monetary Fund’s (IMF) Extended Fund Facility (EFF) arrangement, Ukrainian Finance Minister Natalie Jaresko said Friday.

As part of Ukraine’s effort to avoid defaulting on its estimated $50-billion debt, the IMF is undertaking the first review of its EFF program before approving the latest package.

"The next tranche of IMF funding will be provided after the first review of the [EFF] program has been completed, hopefully in the coming weeks," Jaresko said in a statement published on the ministry’s website.

Kiev received the first IMF package of $5 billion in March and expects to secure as much as $10 billion this year.

The EFF program forms part of a broader financial stabilization effort for Ukraine, which includes a four-year $17.5-billion loan program instituted by the IMF earlier this year and $7.2-billion in fresh financing from official lenders, including the United States, the European Union, Japan and Canada.

Conditional to both bailout packages is Ukraine agreeing a $15.3 billion debt restructuring program with its international creditors, bringing the total to stabilization effort to $40 billion. As part of the restructuring negotiations, the Ukrainian government has indicated that it is considering introducing a one-year moratorium on repaying its debt.

Former IMF economist Jakob Christensen told Sputnik on Thursday that the proposed move could allow the institution to extend financial aid to Ukraine "because they know the money will not be used to pay private creditors."

Jaresko said the Ukrainian government recognized that its creditors might not be prepared to agree, and might continue "to block progress toward a solution."

She stressed that Kiev is ready to use legal powers available to it to suspend payments in order to consolidate the Ukrainian economy and preserve its resources until the negotiations result in a deal.

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