IMF Executive Board Approves US$15.6 Billion under a New Extended Fund Facility (EFF) Arrangement for Ukraine as part of a US$115 Billion Overall Support Package

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 March 31, 2023

  • The IMF Board approved a new 48-month extended arrangement under the Extended Fund Facility (EFF) of SDR 11.6 billion (about US$15.6 billion) as part of a US$115 billion total support package for Ukraine.
  • Ukraine’s EFF-supported program aims to anchor policies that sustain fiscal, external, price and financial stability and support economic recovery, while enhancing governance and strengthening institutions to promote long-term growth in the context of post-war reconstruction and Ukraine’s path to EU accession.
  • The approval of the EFF is expected to mobilize large-scale concessional financing from Ukraine’s international donors and partners, to help resolve Ukraine’s balance of payments problem, attain medium-term external viability, and restore debt sustainability on a forward-looking basis in both a baseline and downside scenario.

Washington, DC: The Executive Board of the International Monetary Fund (IMF) approved today a 48‑month extended arrangement under the Extended Fund Facility (EFF) with an amount of SDR 11.6 billion (577 percent of quota or about US$15.6 billion). This arrangement is part of a US$115 billion total support package for Ukraine. The Executive Board’s decision allows the immediate disbursement of around SDR 2 billion (or US$2.7 billion).

In the first phase of the program, envisaged during 2023-24, the focus will be on (i) implementing a robust budget for 2023 and bolstering revenue mobilization, including by avoiding new measures that might erode tax revenues, (ii) sustaining steady disinflation and exchange rate stability, including through maintaining adequate foreign exchange reserves, and (iii) contributing to long-term financial stability, including by preparing a deeper assessment of the banking sector health and further promoting central bank independence. The authorities are also committed to safeguarding and continuing reforms to strengthen governance and anti-corruption frameworks, including through legislative changes. Social spending will be safeguarded under the program.

The second phase of the program will shift focus to more ambitious structural reforms to entrench macroeconomic stability, support the recovery and early post-war reconstruction, and enhance resilience and higher long-term growth, including in the context of Ukraine’s EU accession goals. Ukraine would be expected to revert to pre-war policy frameworks, principally a flexible exchange rate and inflation targeting, while boosting productivity and competitiveness, strengthening institutions, and tackling financial and energy sector vulnerabilities. In addition, fiscal policies would focus on critical structural reforms to anchor medium-term revenues through the implementation of a national revenue strategy, together with strengthening public finance management and introducing public investment management reforms to support post-war reconstruction.

  1. IMF
  2. <<< Previous Article: IMF and Ukrainian Authorities Reach Staff Level Agreement on a US$15.6 Billion Extended Fund Facility (EFF) Arrangement

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