IMF to monitor Ukraine debt


Wed, Jul 31, 2013 - Page 15

The IMF on Monday said that Ukraine must participate in post-program monitoring because of its relatively large debt to the Washington-based lender, subjecting its economic policies to greater scrutiny.

The IMF said the enhanced monitoring was triggered by its rules, but it could also be a sign that the fund is worried about Ukraine’s ability to pay back the US$8 billion it owed the IMF at the end of last month.

The IMF froze a US$15 billion standby credit program with Ukraine in 2011 after Kiev reneged on commitments to raise gas prices. The program officially expired in December last year.

Ukraine received only two disbursements before the program went off track, totaling about US$3.4 billion.

The IMF’s board decided Ukraine must still participate in the monitoring given the size of its debts to the IMF in relation to the size of the European nation’s economy, the fund said on Monday.

The IMF usually reviews the economies of each of its 188 members once a year, but countries that received aid packages may have more frequent discussions with the fund to ensure they can still repay their debts.

The IMF may choose to step in with advice if it is worried about a country’s debt or policies.

The IMF said its extended monitoring of Ukraine’s economy will take place at the same time as Kiev’s regular economic health check in the fall, and the IMF’s board plans to discuss the findings in December.