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IMF Agrees To Three-Year Lending Plan With Ukraine Worth $5.5 Billion

IMF chief Kristalina Georgieva
IMF chief Kristalina Georgieva

WASHINGTON -- International Monetary Fund (IMF) chief Kristalina Georgieva says the lender has reached agreement with Ukraine on a new three-year loan program worth $5.5 billion.

Georgieva said in a statement on December 7 that the agreement was finalized following “a very constructive” phone call with Ukrainian President Volodymyr Zelenskiy in which she commended the new leader with reforms carried out in recent months.

Georgieva, a Bulgarian economist, assumed her IMF role on October 1, while Zelenskiy took office in Ukraine on May 20 after an electoral victory over predecessor Petro Poroshenko.

“During our conversation, I commended [Zelenskiy] for the impressive progress that he and his government have made in the past few months in advancing reforms and continuing with sound economic policies,” Georgieva said in her statement announcing the loan deal.

She said the three-year plan is subject to approval by the IMF executive board and that the “effectiveness of the arrangement will be conditional on the implementation of a set of prior actions.”

“The president and I agreed that Ukraine’s economic success depends crucially on strengthening the rule of law, enhancing the integrity of the judiciary, and reducing the role of vested interests in the economy,” she said.

She also said it was “paramount to safeguard the gains made in cleaning up the banking system and recover the large costs to the taxpayers from bank resolutions.”

In September, the IMF said that fighting corruption would be a key component of any new lending program that Ukraine receives.

Before his appointment in August, Ukrainian Prime Minister Oleksiy Honcharuk said Kyiv wanted to replace the existing $3.9 billion standby arrangement with the IMF that expires at year-end and replace it with a longer-term program.

One “important element of the discussions,” IMF Communications Director Gerry Rice said at the time, was the “importance of creating an effective anti-corruption framework,” which has been a “critical element of our engagement with Ukraine for the last few years.”

Ukraine ranks 120th out of 180 countries on watchdog Transparency International's perceived corruption index.

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