WASHINGTON -- The International Monetary Fund (IMF) has approved a second loan tranche worth nearly $700 million to Ukraine, giving a boost to President Volodymyr Zelenskiy's government as it struggles to meet reform targets set by the lender.
The Washington-based organization, considered the world’s lender of last resort, said on November 22 that the IMF-backed economic program aims to help Kyiv “address the effects of the COVID-19 shock, sustain the economic recovery, and move ahead on important structural reforms to reduce key vulnerabilities.”
In September, Ukrainian Prime Minister Denys Shmyhal said Kyiv expected to receive the second tranche from the IMF under a $5 billion loan program before the end of the year.
An IMF mission visited Kyiv in September to evaluate Ukraine’s progress on several key reforms, including judicial, central bank, and anti-corruption legislation, that the loans are contingent upon.
The IMF last year approved the 18-month loan to help the country deal with the economic impact of the coronavirus pandemic. Ukraine received its first tranche totaling $2.1 billion in June.
The latest decision is welcome news for Zelenskiy's government, which is grappling with surging coronavirus cases, higher inflation, and growing jitters about Russian troop movements on its eastern borders.
"Grateful to @IMFNews Board of Governors for the decision to complete the review of the stand-by program on the allocation of a tranche of about $700 million," Zelenskiy wrote on Twitter. "We'll use these funds to support the financial system & combat #COVID19 consequences. The IMF program will be continued."
Ukraine’s parliament in July passed judicial reform, which has been a top priority for the nation’s Western backers because it is seen as essential to enhancing the rule of law and curbing corruption.
Civil society activists say outside experts are necessary because the nation’s judicial system is deeply corrupt and incapable of reforming itself, pointing to past failures to rid itself of compromised judges.
International business associations say Ukraine’s corrupt judiciary is a major hindrance to foreign investment.