"Although current efforts have not yet resulted in a negotiated agreement, and will need to continue in the coming months, staff assesses that they are consistent with the requirements under the policy on lending into arrears to official bilateral creditors and that the conditions are met to proceed with the review," the fund said in its second review of Ukraine's reforms under the Extended Fund Facility (EFF) financial help program.
The $3-billion loan was secured by the government of then-President Viktor Yanukovych in late 2013. Moscow has repeatedly stated that Kiev's inability to pay back the debt means a default thus rendering Ukraine unable to receive IMF help, while the IMF altered its policy on defaulting debtors in late 2015, allowing the fund to continue lending to countries that have partially defaulted on their sovereign debt. Russia has filed a lawsuit against Ukraine over the issue.
In mid-September, the executive board of the IMF agreed to provide the new $1-billion tranche of financial aid to Ukraine despite the country being unable to settle its debt with Russia. The disbursement was then subject to the findings of the review.
On March 11, 2015, the IMF approved a four-year program of financial aid to Ukraine, which stipulates a $17.5-billion loan to be paid out in a number of installments over the next four years and originally open for reviewing on a quarterly basis.
Ukraine heavily relies on foreign aid to support its economy and to pay debts amid the ongoing armed conflict with independence supporters in the country's southeast.
