The International Monetary Fund (IMF) has reached a financing agreement with Ukraine worth $15.6 billion (£12.8 billion).
In the coming weeks, the organization’s first loan to a country at war is anticipated to be approved.
It would also be one of the largest financial transfers Ukraine has received since the invasion by Russia.
Recently, the IMF modified a rule to permit loans to nations confronting “exceptionally high uncertainty.”
“Russia’s invasion of Ukraine continues to have devastating effects on the economy,” said IMF official Gavin Gray in a statement. In 2022, economic output fell 30%, much of the capital stock was destroyed, and poverty rose.
“The program has been designed by the new fund’s policy on lending under extremely high uncertainty, and donors. Including the G7 and EU, are expected to provide strong financing guarantees.”
Mr. Gray also stated that the agreement would “mobilize large-scale concessional financing” from international donors and partners for Ukraine, without providing further details. The funding still requires executive board approval from the IMF.
The IMF anticipates a modest contraction or expansion for Ukraine’s economy this year.
The funding, according to Ukrainian Prime Minister Denys Shmyhal, will assist the nation in “financing all essential expenditures, ensuring macroeconomic stability, and enhancing our relationships with other international partners.
Janet Yellen, who made an unannounced visit to Ukraine last month, stated, “An ambitious and appropriately conditioned IMF program is essential to support Ukraine’s reform efforts.”
The United States is the largest shareholder in the IMF and the greatest financial contributor to Ukraine.
Earlier this year, President Joe Biden announced an increase in US military aid to Ukraine of nearly $500 million. This was in addition to the $112 billion spent by Congress alone in 2022.
More than half of US expenditures on Ukraine are allocated to military aid, which funds drones, tanks, missiles, and other munitions systems, as well as training, logistics, and intelligence support.
Since Russia invaded Ukraine in February of last year, funding has continued to pour in from all over the globe.
Last week, the IMF’s executive board authorized money for “exceptionally high uncertainty” countries.
Without mentioning Ukraine, it stated that the measure applied to nations experiencing “exogenous shocks beyond the control of national authorities and the reach of economic policies.”
