The Strategist

IMF allows Ukraine to issue $1.3bn worth of hryvnia if external financing falls short

12/23/2022 - 09:39

Ukraine has been granted permission by the IMF to print hryvnias worth $1.3 billion. The agency has authorized the issuance of up to 50 billion hryvnyas in 2023 in the event of a funding shortfall from abroad.

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In the event of a lack of foreign funding, the Ukrainian government will be able to print up to 50 billion hryvnias (about $1.36 billion at the Ukrainian National Bank's exchange rate) in the first quarter of 2023. The International Monetary Fund (IMF) and Kiev signed a memorandum to that effect.

The IMF stated in the document that "risks remain extremely high" and "the next few months look extremely challenging" due to strikes on Ukraine's critical infrastructure. Under these conditions, Ukrainian authorities must adapt to rapidly changing circumstances, including a significant deterioration of the situation. In the event of "shocks," Kiev has stated its willingness to adjust policies.

According to the IMF, in a worst-case scenario, Ukraine's external financing will total $57 billion by 2023. The fund notes that Western countries must provide Ukraine with $3 billion to $5 billion per month between now and 2023. Ukrainian President Volodymyr Zelenskyy asked EU leaders in October to cover the $38 billion budget deficit in 2023.



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