Ukraine has received about USD 1.4 billion as the first loan tranche under the International Monetary Fund’s new Stand-by Arrangement (SBA), which increased the country's international reserves to USD 20.1 billion as of December 21, 2018, the CFTS portal reports, citing the Interfax Ukraine news agency.
"This is a five-year high. The last time Ukraine had such a high amount of international reserves was in January 2014," the National Bank of Ukraine said on Friday.
According to the National Bank of Ukraine, the new Stand-by Arrangement provides for disbursement of loans totaling about USD 3.9 billion to Ukraine over 14 months. The program will focus on continuing the ongoing fiscal consolidation to keep public debt on a downward path; further reducing inflation, while maintaining a flexible exchange rate regime; strengthening the financial sector, promoting asset recovery, and reviving bank lending; advancing a focused set of structural reforms, particularly to improve tax administration, privatization and governance.
The continuation of Ukraine’s cooperation with the International Monetary Fund also opened access to related funds for Ukraine. On December 18, the World Bank approved a USD 750 million Policy-Based Guarantee (PBG) for Ukraine, which the Ukrainian government plans to use to raise up to USD 1 billion in foreign borrowings.
In early November, the National Bank of Ukraine lowered its forecast for Ukraine’s international reserves from USD 20.7 billion to USD 19.2 billion at the end of 2018, from USD 18.8 billion to USD 18.6 billion in 2019, and from USD 19.7 billion to USD 19.1 billion in 2020.
As the CFTS portal reported, the European Commission disbursed EUR 500 million as the first tranche of macro-financial assistance to Ukraine on December 12.