IMF head positive about completion of second review for disbursing new tranche to Ukraine

"I think we had very good discussions that will help hopefully the conclusion of the negotiations on the memorandum which our teams are working on. And if they're successful in concluding that process – which I hope – we'll be able to have a board meeting in the near term to complete the second review," she told reporters after talks with Ukrainian President Petro Poroshenko in Davos on Thursday. "We had an excellent discussion, very productive. We discussed the latest economic development on the global basis and in Ukraine. We also discussed the reforms under way, and the latest development on the budget for 2016," she added. "We're now discussing a future memorandum with the International Monetary Fund. We reach all the agreements," Poroshenko said in turn. "And from my point of view, the ambitious program of reform is helping Ukraine in 2016. And I'd like to thank Ms.Christine Lagarde for that," he added. The four-year Extended Fund Facility (EFF) program, which opened in March 2015 and totaled SDR 12.348 billion (around $17 billion according to the current exchange rate), with the first tranche of $5 billion, initially involved quarterly reviews of the program, disbursing three SDR 1.18 billion (around $1.63 billion) tranches in 2015, and reducing quarterly tranches in 2016-2018 to SDR 0.44 billion ($0.61 billion). Ukraine was able to get only the first two tranches, the first one was partly ($2.7 billion) used to support its national budget; the rest of the funds went to the traditional recipient, the National Bank. According to Ukraine's Finance Minister Natalie Jaresko, before making a decision on whether to grant Kyiv yet another tranche the IMF will be assessing compliance with all pre-conditions and structural 'beacons' that were to have been met before the end of December 2015. If these conditions were fulfilled successfully, IMF directors could meet to discuss disbursement of a third EFF tranche in late January-February.