IMF on the finals stages of providing $15.6 billion more to Ukraine

The International Monetary Fund (IMF) is apparently in the final stages of hammering out a fresh lending program worth a substantial $15.6 billion for Ukraine. The program, which is expected to last for four years, has been reported by Ukrinform and confirmed by sources cited in a Financial Times report. The precise size of the loan has been a subject of negotiation, with earlier discussions between the IMF and Ukraine suggesting that it could fall somewhere between $14 billion and $16 billion.

According to the Finance Ministry of Ukraine, the country has received an impressive $25 billion in budgetary assistance from both the United States and the European Union since Russia's full-blown incursion in February 2022. This figure was released on March 15 and comes on top of the $2.7 billion in emergency funding previously granted by the International Monetary Fund last year. All in all, Ukraine has benefited from more than $38 billion in budget support from a range of countries and international financial organizations since the outset of the war.

A quick glance at IMF

The International Monetary Fund (IMF) was created in 1944 with the goal of promoting international monetary cooperation, facilitating international trade, and reducing poverty by providing financial assistance to countries in need. The IMF has been widely recognized as a key institution in the global economic system, playing a crucial role in the stabilization of financial markets and the management of economic crises around the world. The organization is rooted in the Bretton Woods system, which was established after World War II and sought to create a stable monetary system that would prevent the economic instability that had contributed to the Great Depression.

One of the main goals of the IMF is to provide short-term financial assistance to countries that are experiencing balance of payment problems, such as a shortage of foreign exchange reserves or a sudden drop in export revenues. The IMF provides loans to member countries, which must agree to certain policy conditions in order to receive the funding. These conditions often include implementing economic reforms and austerity measures, such as reducing government spending and increasing taxes, in order to address the underlying causes of the balance of payment problems and promote long-term economic stability.

The IMF also provides policy advice and technical assistance to member countries, with the goal of helping them to develop sound economic policies and strengthen their institutional frameworks. This includes advice on issues such as exchange rate policy, fiscal policy, monetary policy, and financial sector regulation.

Critics of the IMF argue that its policy conditions have often led to negative social outcomes, such as increased poverty and inequality, and have failed to address underlying structural issues in the economies of borrowing countries. However, supporters argue that the IMF plays a critical role in stabilizing financial markets and promoting long-term economic growth and stability.