KYIV, Sept 23 - Ukraine is working to fulfill the conditions of a $5 billion loan program from the International Monetary Fund and expects to hold talks with an IMF mission online this autumn, Yulia Kovaliv, the deputy chief of President Volodymyr Zelenskiy’s office, said.

The disbursal of the next loan tranche by the IMF is crucial for Ukraine to unlock more financial assistance from the European Union and the World Bank, including receiving money to overcome economic slowdown caused by the coronavirus pandemic.

"We are working together with the IMF so that the IMF mission comes to an online mission, which will be new in our relationship with the Fund in the autumn," she said at a press conference on Tuesday.

A person familiar with the situation said the IMF’s loan has been de-facto put on pause, and the government’s proposal of the 2021 budget with wider-than-expected deficit of 6% of GDP, along with recent bills seeking to provide controversial tax exemptions, only increase the odds that the IMF would further postpone the tranche.

The IMF on June 9 approved a new 18-month stand-by program for Ukraine for SDR 3.6 billion ($5 billion) with an immediate allocation of $2.1 billion of the first tranche.

After the allocation of the first tranche, four revisions of the program were planned: following the results of June, September and December 2020, as well as June 2021 with the completion of these revisions, respectively, on September 1 and December 1, 2020 and on May 15 and October 15, 2021. The amount of the second and third tranches will be $700 million, the third one will be $560 million and the final fourth will be $980 million. It was expected that the virtual mission for the first revision of the program would work on July 13-23, but this plan was violated.

Other international financing of Ukraine is also tied to the IMF program. In particular, the successful first revision of the stand-by program will allow receiving already approved $350 million from the World Bank and EUR600 million from the EU.

The IMF representative on September 10 found it difficult to name the possible date of the mission for the first revision of the stand-by program and the allocation of its second tranche. Refusing to directly comment on the decision of the Constitutional Court, which called into question a number of aspects of the work of the National Anti-Corruption Bureau of Ukraine (NABU), the IMF representative said that maintaining the independence and integrity of NABU, SAPO and HACC is a precondition for this IMF support program. According to him, discussions about the current stand-by program continue.

Finance Minister Serhiy Marchenko said that among the issues that are of interest to the IMF, the most priority one is "the situation around PrivatBank and the Surkis brothers" [a dispute for $350 million regarding bail-in during the nationalization of PrivatBank]. According to the head of the Finance Ministry, the following is the situation with the limitation of salaries for members of supervisory boards and the board; bills registered in the Verkhovna Rada that discredit the corporate governance system; SAPO and NABU. (om/ez)