New Ukrainian finance chief targets May for next IMF loan and other aid

Bloomberg

Ukraine’s new finance minister said the next tranche of a delayed $17.5 billion International Monetary Fund loan could arrive as early as May.
A mission from the Washington-based lender may visit within a month, said OleksandrDanylyuk, appointed April 14 after weeks of wrangling over a new government. Ukraine understands its IMF commitments and will implement a delayed increase in natural gas prices, while parliament will pass a corporate-governance law as early as this week, he said in an interview in Kiev.
“When the mission comes, we need to fulfill all our obligations, and we’re in the process of doing so,” said Danylyuk, who’s worked in the past at McKinsey & Co. and who replaced U.S.-born Natalie Jaresko. “Regarding the tranche: as soon as we sign a new updated memorandum, then we have a board meeting and then it goes.”
Danylyuk, 40, is part of a revamped cabinet led by Prime Minister Volodymyr Hroisman that’s tasked with stepping up stalled reform efforts, particularly anti-graft measures, and restarting the IMF loan. Delays in receiving the funds prompted concern from the central bank, which warned of risks to the hryvnia and foreign reserves after the stockpile fell for the first time in almost a year in March.
While Ukraine’s currency has weakened 5.5 percent against the dollar this year, once IMF cooperation is restored “the risk for the currency will be seriously diminished,” Danylyuk said. “To get back to the IMF program is a matter of priority for me.”
The hryvnia was little changed against the dollar Wednesday, while the yield on government bonds due 2019 fell seven basis points to 9.659 percent, the lowest since lawmakers approved the new government.
Danylyuk, who arrived at the Finance Ministry from a position as President Petro Poroshenko’s deputy chief of staff, has big shoes to fill. Jaresko was popular among investors after leading a $15 billion restructuring of Ukrainian state debt last year. She was among the most reform-minded officials in the administration that took over after protests toppled Kremlin-backed leader Viktor Yanukovych in 2014.
Additional financing such as a $1 billion loan guarantee from the U.S. may also be signed “quite soon,” according to Danylyuk. Foreign donors have said the flow of funds will depend on progress in tackling graft, a scourge since communism fell 25 years ago. “We’re talking about $3.4 billion within several months,” Danylyuk said. The $1.7 tranche from the IMF is unlocking $1.7 billion in other aid, he said.