The IMF is a special UN-organization enjoying a wide autonomy. The UMF was founded in 1945 with the task to foster monetary cooperation and trade, to secure financial growth and increase employment. The IMF has 188 member states which lead the Fund through the Executive Board.
Ukraine has been a member of the IMF since 1992. The IMF is now one of the most important financial partners of Ukraine. Since the end of the Revolution of Dignity Ukraine has already received 4 tranches of financial aid totaling USD 11 bn (equal to SDR 7.7 bn) in accordance to both IMF programs: Standby and Extended Fund Facility (EFF).
The main goals of the cooperation with the IMF are to stabilize the Ukrainian financial system, to implement structural reforms and to set the course for sustainable economic growth. The Fund is helping Ukraine restore its financial capabilities by advising on the most effective way to implement its reform agenda. Cooperation with the IMF also paves the way to receiving funds from other international financial organizations (World Bank, EBRD, EIB and others) and from the governments of other states including the USA, the EU, Germany, Canada, Japan and others.
More information on the IMF can be found on its official website http://www.imf.org/external/index.htm.
History of cooperation between Ukraine and the IMF:
1994-1995: Ukraine cooperated with the IMF in the format of a system transformation loan amounting SDR 498.7 mn (USD 763.1 mn) aimed to support the balance of payments of Ukraine.
1995-1998: in line with three one-year Standby programs Ukraine received loans from the IMF amounting SDR 1318.2 mn (USD 1935 mn) in total. The main goal of those loans was to support the exchange rate of the Ukrainian currency and to cover the Ukrainian budget deficit.
1998-2002: Ukraine cooperated with the IMF under a EFF program (EFF - Extended Fund Facility) amounting USD 2.6 bn. Under the EFF Ukraine received SDR 1193 mn (USD 1591 mn) which were used to increase the currency reserves of the National Bank of Ukraine.
2002-2008: in the end of 2002 the Cabinet of Ministers of Ukraine decided that the further cooperation with the IMF should continue without loans on the basis of the one-year program “precautionary standby” which was approved by the Executive Board of the IMF on March 29, 2004, and granted a possibility to receive new loans from the IMF as well as to receive a reserved loan amounting SDR 411.6 mn (30% of Ukraine’s quota) in case if the balance of payments of the currency reserves of the country should be affected.
However, the terms of that program were not complied with. Due to that, the program was not reviewed and could not be resumed in its validity period (till the end of March 2005).
2005-2008: cooperation between Ukraine and the IMF was focused on technical aid. That approach was in line with the thesis of the President of Ukraine «Reaching the future without debts» and put emphasis on a step-by-step transition to loan-free relations with the IMF, coordination of the core macroeconomic targets with the trends and forecasts of the global economic cycles as well as dynamics and direction of global investment activities. It was also planned to deepen coordination in the currency policy.
2008–2013: due to the sweeping crisis on the global financial markets and its impact on the economy of Ukraine, our country applied for a new Standby cooperation program. On November 5, 2008, the Executive Board of the IMF approved a two-year program equal to 802% of the Ukrainian quota, i.e. SDR 11 bn (approx. USD 16.4 bn). SDR 3 bn were urgently transferred to the currency reserves of the National Bank of Ukraine.
Under that program Ukraine was granted 3 tranches totaling SDR 7 bn (USD 10.6 bn). A part of the second tranche amounting USD 1.5 bn and the complete third tranche were transferred directly to the state budget of Ukraine.
On July 28, 2010, Ukraine agreed a new Standby program with the IMF totaling SDR 10 bn (USD 15.1 bn) for a period of two and a half years. The previous Standby program agreed in November 2008 (including the remaining tranches) was canceled.
Under that program Ukraine received two tranches: SDR 1.25 bn (USD 1.89 bn, including USD 1.022 bn transferred directly to the state budget) and SDR 1 bn (approx. USD 1.5 bn) including USD 1 bn transferred directly to the state budget. Further tranches were denied due to the non-compliance of the Ukrainian government with the terms of cooperation with the IMF.
2014-2015: on April 30, 2014, after the Revolution of Dignity, building of the new government and based on compliance with preliminary conditions, the IMF approved a new standby loan for Ukraine amounting USD 16.5 bn (SDR 10.976 bn). Under this program Ukraine received two tranches amounting USD 3 bn (SDR 2.058 bn) and USD 1.3 bn (SDR 914.7 mn) respectively, but in the summer of 2014 the macroeconomic data which served as the basis for the program had to be amended due to the full-scale economic crisis in Ukraine combined with the Russian aggression in the Eastern part of the country. Taking that development into account and in line with the request of the Ukrainian government the IMF on March 11, 2015, replaces the above standby program with the new four-year program “Extended Fund Facility” (EFF). The first tranch amounting USD 5 bn was granted to Ukraine immediately upon approval of the program. The second tranche of USD 1.7 bn (transferred to the currency reserves of the National Bank) was approved by the Executive Board of the IMF on July 31, 2015.