The IMF needs a new toolkit to help Ukraine
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The IMF needs a new toolkit to help Ukraine

Ukraine’s recent debt restructuring agreements with international bondholders give it a better prospect of returning to market once its war with Russia ends. But the IMF – more used to pulling countries out of purely economic crises – faces a policy challenge in assisting a country at war.

Yuriy Butsa, Ukraine’s government commissioner for public debt management

The IMF may have to rethink its toolkit if it is to provide Ukraine with the help it needs, according to Yuriy Butsa, Ukraine’s government commissioner for public debt management.

Speaking to Euromoney while holding discussions with US-based investors, Butsa says that Ukraine’s situation poses unique challenges for an institution that was not created to help finance countries at war but rather to extricate them from economic crises that are often of their own making.

“Ukraine is not an Argentina or a Sri Lanka,” he says. “It was Russia’s invasion of Ukraine that caused all the problems, not bad policies.”

In July and August, Ukraine reached debt restructuring agreements with Paris Club and G7 lenders, as well as with international bondholders. Now it faces its next challenge: to secure an IMF programme that central bank governor Kyrylo Shevchenko has said could be in the order of $15 billion to $20 billion, to help the country fund its deficit until it is able to restore more traditional access to the market.

What makes agreement difficult is that IMF programmes typically require the recipient country to put in place a credible plan for repayment.

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