With the summer slipping away, the realistic scenario for Ukraine’s relationship with the IMF might be to convert Ukraine’s frozen Stand-By Arrangement into an Extended Fund Facility

, wrote Timothy Ash, a veteran observer of Ukraine’s IMF deals. The IMF may “look to roll the monies into a new EFF to be negotiated towards year end – maybe that should now be the focus,” Ash writes from London. “Any such EFF would then roll in much needed structural reform conditionality. Arguably the problem with the current SBA was that it lacked any real structural benchmarks.”

Separately, Ukraine’s Finance Minister Serhiy Marchenko reported Friday that Ukraine and the IMF have reached a compromise on anti-corruption and corporate governance reforms.

 Last week, Marchenko had a series of meeting with IMF officials in Washington to try to restart the IMF lending program that stalled one year ago. The Finance Ministry statement concluded: “The parties agreed on close communication and joint work to be able to reach the Staff level agreement in the near future.” Earlier in the week, Economy Minister Oleksiy Lyubchenko said Ukraine’s government expecting to receive the $700 million loan tranche before the end of this year.

If both laws were deemed ‘IMF compliant,’ they would contribute to restarting in July the long dormant process of an IMF review and to the resumption of lending in September

. Ukraine’s $5 billion IMF program stalled after a first tranche was disbursed one year ago. Compliance with an IMF program reassures foreign investors. Compliance would also change the dynamic of President Zelenskiy’s visit to the White House at the end of July.

Ukraine’s foreign currency payments on public and publicly guaranteed debt will exceed $10 billion over the next year,

 reports the National Bank of Ukraine. In addition, payments on hryvnia debt will be around $5 billion in the second half of this year. With no disbursements over the last year from Ukraine’s IMF program, relief could come from a new issue of special drawing rights, a move now under discussion by the IMF. “If the issue is approved by the IMF Board of Directors, Ukraine will increase its international reserves by about $2.7 billion,” Ukraine’s central bank reports on

Ukraine and IMF may reach a staff level agreement in the next few weeks,

close to the one year anniversary of the $5 billion Stand-By Agreement, Yuriy Geletiy, Deputy Governor of the National Bank of Ukraine, announced in an interview with FinClub. Referring to reforms that must pass the Rada, he said: “Work with our Banking Committee is quite constructive. I hope it will be the same with other committees, which will consider the legislative changes needed to continue cooperation with the IMF.” After the IMF approved an 18-month stand-by program last June 9,

The IMF’s decision to distribute $650 billion in Special Drawing Rights this summer is undermining arguments for free market changes in countries like Ukraine,

Timothy Ash argues in an essay. He writes from London: “The hope was the looming debt service hump for Ukraine in Q3, when $3bn in external debt falls due, would concentrate minds in the Zelenskiy administration. But likely with $2.8bn in SDR allocations due in September now, I think there will be zero incentive on the part of the administration to do anything to meet the conditionality in the SBA [Stand-by Arrangement]. This SBA is dead now in my mind,

Ukraine may receive $2.7 billion from the IMF this summer

under a plan by the International Monetary Fund Managing Director, Kristalina Georgieva, to allocate $650 billion from international reserves to restore the world economy after the coronavirus crisis. Unlike the conventional IMF programs this money would not have to be paid back. The National Bank of Ukraine Governor, Kyrylo Shevchenko, announced the possible windfall yesterday following a meeting with Alfred Kammer, the Director of the IMF’s European Department.