KYIV, July 7 – Finance Minister Volodymyr Marchenko is in Washington trying to persuade the International Monetary Fund to release $700 million in loans before the end of the year, a senior official said Wednesday.

Oleksiy Liubchenko, deputy prime minister and economy minister, said it was important for Ukraine to secure low-interest loans and the government has been committed to reforms.

"Just at this moment, the Minister of Finance is at the International Monetary Fund for negotiations in the United States. It is about last year's sums - $700 million of summer-autumn," Liubchenko said at a press conference at the Ukraine 30 forum on Wednesday.

Liubchenko said the government has implemented commitments, "in terms of institutional changes, direct actions of the government,” and hopes

"Therefore, we very much hope that this tranche will materialize, because giving up cheap money is pointless," Liubchenko said.

At the same time, he stressed that he does not expect economic shocks in Ukraine if the IMF tranche does not enter the country by the end of the year.

On June 9, 2020, the IMF approved a new 18-month Stand-By Arrangement for Ukraine for SDR3.6 billion (about $5 billion) with an immediate issue of $2.1 billion of the first tranche.

Bank of America (BofA) concluded in a report last month that Ukraine may be tempted to borrow money from financial markets in order to avoid implementing painful economic reforms and anti-corruption measures.

"However, we also think that the Ukrainian authorities may try to 'graduate' from reliance on IMF financing during the next electoral cycle in the second half of 2023 – the first quarter of 2024," BofA analysts said in the report.

The next Parliamentary election is planned for October 2023, followed by presidential election in March 2024. This leaves 2022 as the remaining window for continued close cooperation with the IMF, BofA believes.

"We think the extension of the current SBA program [under the stand-by arrangements] for another year or so is the most likely scenario. The extension may allow Ukraine to roll over at least part of its nearly $3 billion in maturities to the IMF in 2021-2022," BofA said in the report. (om/ez)