The IMF expects a moderate impact of the trade embargo ORDO on the economy of Ukraine – NBU

Experts of the International monetary Fund (IMF) expect a modest impact on the economy of Ukraine the trade embargo of certain regions of Donetsk and Lugansk regions, according to a press release from the National Bank of Ukraine (NBU).

“The decision on granting the next tranche was made after further examination by the IMF of a possible impact of the trade embargo on the Ukrainian economy and update the macroeconomic forecasts of the NBU and the Ministry of Finance estimates. The IMF experts concluded that the blockade will have a moderate impact on economic growth and the balance of payments, and does not pose a threat to fulfil the inflation target of the national Bank”, – stated in the document.

According to the Central Bank, a condition of granting the next tranche of funding was the significant progress of Ukraine in the cleanup and stabilization of the banking system.

“The joint decision of the government and the NBU in the end of 2016 on joining the state capital of “PrivatBank” (the Dnieper) was an extremely important precondition for the further financing from the IMF. With the support of foreign creditors, including the IMF, the world Bank (WB), European Bank for reconstruction and development (EBRD) to the countries “the Big seven” (G7), the transition of “PrivatBank” in state ownership received positive feedback from the international community as an example of international best practice on financial restructuring of systemically important financial institutions”, – said the national Bank.

The regulator will continue to work to ensure that all banks in Ukraine operate at the highest level of regulatory practices and transparency that should be required to promote the sustainable and stable growth in Ukraine.

The national Bank welcomed the IMF decision on granting the fourth tranche of financing in the framework of the EFF to replenish international reserves of the country, and as a consequence, the strengthening of financial stability of Ukraine.

“This is the fourth installment in the four-year eff EFF, which is a confirmation of the success of reforms aimed at creating a more stable and sustainable financial system and the economy. This is the most successful IMF program in the history of Ukraine”, – concluded the NBU.