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IMF, Ukraine Pencil $5 Billion Deal To Help With Debt Repayments

The IMF says the draft agreement will ensure that Ukraine is "well poised to return to growth and resume broader reform efforts." (file photo)

The International Monetary Fund (IMF) and Ukrainian officials reached a staff-level agreement on a new $5 billion stand-by arrangement to help Kyiv cope with economic shock caused by the coronavirus pandemic.

The agreement is subject to approval by the IMF's management and executive board, which will look at the deal "in the coming weeks," the IMF said in a statement.

The agreement aims to provide balance of payments and budget support over a period of 18 months.

IMF Ukraine mission chief Ivanna Vladkova Hollar says it will ensure that Ukraine is "well poised to return to growth and resume broader reform efforts when the crisis ends."

The arrangement also is expected to "catalyze additional bilateral and multilateral financial support," she added in the statement.

The fund's governing executive board generally follows the recommendations of the technical teams.

Ukrainian lawmakers last week approved banking legislation paving the way for billions in assistance to flow from the IMF.

Ukraine has been in talks with the IMF for months about a loan tied to reforms to help the country meet a spike in debt repayments this year.

Ukrainian President Volodymyr Zelenskiy said on May 20 that he was certain a memorandum with the IMF would be signed by the end of May to bolster the country's finances.

"We have large debts to international entities. We are a serious nation, but we are a poor country. We are paying off billions of U.S. dollars annually to international organizations," Zelenskiy told a press conference to mark his first anniversary in power.

"We will sign this memorandum, I am sure that we will sign it in May. It cannot be delayed," he added

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