Ukraine and the IMF
Camdessus Expresses Support for US$1.8 Billion
of IMF Credits for Ukraine
Michael Camdessus, Managing Director of the International Monetary
Fund, said today he had received a request from the Ukranian authorities
for a 12-month stand-by arrangement for SDR 997.3 million (about US$1,492
million) in support of their adjustment and reform program. The authorities
also indicated their intention to request a second drawing of SDR 249.3
million (about US$373 million) under the IMF's Systematic Transformation
Facility (STF). Together the two credits being requested will amount to
about US$1.8 billion, or the equivalent of 125 percent of Ukraine's quota
in the IMF. The authorities' program is set forth in a Memorandum of
Policies that is being submitted to the IMF's Executive Board, which is
expected to consider the two credit requests in a few weeks' time.
The program that the Ukrainian authorities have designed has three
strategic objectives: to bring inflation down quickly through a major
reduction in the budget deficit; to strengthen the performance of
exports, in particular by removing administrative regulations; and to
lay the foundations for a recovery in economic activity by pressing
ahead with market-oriented economic reforms. "It is a comprehensive,
strong and courageous program," Camdessus said. "If implemented
rigorously, it will constitute a decisive break with the past that
Ukraine sorely needs and that the international community will surely
Camdessus called upon Ukraine's partners to provide financial
support on appropriate terms to close a large balance of payments gap.
"Such support," he remarked, "is warranted by the strength of the
adjustment policies to which the Government of Ukraine is committing
itself, and is also essential to the very coherence of the program."
Camdessus expressed confidence that international support on the
needed scale would be forthcoming and that the IMF's Executive Board
would approve Ukraine's request for assistance from the Fund.
IMF EXTERNAL RELATIONS DEPARTMENT