KYIV, May 20 - President Volodymyr Zelenskiy said Wednesday that Ukraine and the International Monetary Fund will sign a new deal this month that will open door for lending to the country.
“We will sign this memorandum, I am sure, in May ... and the door will be open for the International Monetary Fund assistance,” Zelenskiy said a press conference.
Ukraine was in talks with the IMF for weeks over $5 billion Standby arrangement for 18-month support through lending to help the government push forward economic reforms, Finance Minister Serhiy Marchenko said.
Ukraine may be able to get the first installment of the loan, or about $1.9 billion, before the end of May 21, Marchenko said.
The Standby arrangement replaces months of talks over Extended Fund Facility program, a three-year lending program.
The developments comes a week after Ukraine’s parliament passed a banking reform bill, the key remaining obstacle on the way to the deal with the IMF.
The new legislation prevents the former owners of insolvent banks from regaining their assets. It is seen mainly as being aimed against the interests of Ihor Kolomoisky, a tycoon and an early backer of Zelenskiy’s 2019 election campaign.
Kolomoisky used to co-own Ukraine’s largest lender, PrivatBank, until it was nationalized in 2016. He has waged a long legal battle against the government to either recover it back or receive compensation.
Ukraine’s economy, one of Europe’s weakest, will contract by around 5% this year as stringent lockdown measures throttle businesses, according to government estimates.
The banking bill’s passage had been uncertain. Lawmakers, including some who used to work for Kolomoisky, had submitted more than 16,000
amendments to the legislation, which Zelenskiy’s party feared could mean months of delay.
The changed IMF program, and Zelenskiy’s decision to sack reform-minded officials this year including the prosecutor general and the finance minister, have raised questions about his government’s ability to drive reforms. (tl/ez)