Ukraine Clinches $15.6bn IMF Loan, First for Nation at War

The international Monetary Fund has reached an agreement with Ukraine as the country tries to shore up its economy.

The International Monetary Fund (IMF) says it has reached an agreement with Ukraine on funding worth $15.6bn, making it the first loan to a country at war. The fund will reportedly be approved in the coming weeks.

If approved, the fund will be one of the largest financing packages Ukraine has received since Russia’s invasion. According to BBC, IMF recently changed a rule to allow loans to countries facing “exceptionally high uncertainty.”

In a statement released by IMF official Gavin Gray on Tuesday, “the programme has been designed in line with the new fund’s policy on lending under exceptionally high uncertainty, and strong financing assurances are expected from Ukraine’s international donors and partners.”

The IMF said the agreement would unfold in two stages, with the first 12-18 months devoted to build “fiscal, external, price and financial stability”, reports Financial Times. This would be focused on “revenue mobilization” as well as eradicating “monetary financing and relying on domestic debt markets instead, said the report.

Report says the second phase of the deal, which will last four years, is intended to “entrench macroeconomic stability, support recovery and early reconstruction. The IMF said “during the second phase, Ukraine would be expected to revert to prewar policy frameworks, including a flexible exchange rate and inflation-targeting regime.”

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