Ukraine FAQs

Frequently-Asked Questions on Ukraine

The overarching goal of the US$15.6 billion extended arrangement under the Extended Fund Facility is to help Ukraine solve its balance of payments problems and sustain economic and financial stability at a time of exceptionally high uncertainty, restore debt sustainability, and promote reforms that support Ukraine’s recovery on the path toward EU accession in the post-war period.
In view of the exceptionally high uncertainty, the IMF-supported program envisions a two-phased approach: in the first 12-18 months of the program, the focus will be on sustaining macroeconomic and financial stability, including by (i) bolstering revenue mobilization and avoiding new measures that erode tax revenues, (ii) eliminating monetary financing and aiming at net positive financing from domestic debt markets, (iii) contributing to long-term financial stability, and (iv) continuing reforms to strengthen governance and anti-corruption frameworks, including through legislative changes.
In the second phase, as the conflict subsides, the program will shift focus to more expansive reforms to entrench macroeconomic stability, support recovery and early reconstruction, and enhance resilience and higher long-term growth, including to support Ukraine’s EU accession goals. In addition, over the medium-term as conditions permit, the authorities plan to revert to pre-war policy frameworks, principally a flexible exchange rate and inflation targeting.

Ukraine’s financing needs are substantial, and the concessional support of various international partners, including the European Union, the United States, the G7, and other IFIs is essential to help put the country back on the path of fiscal and external viability.
The IMF’s 48-month extended arrangement under the Extended Fund Facility is part of a US$115 billion support package over the program period, involving sizable official financing in the form of grants and concessional loans, as well as debt relief.
For 2023 alone, IMF staff estimates that the country has a US$42 billion finance gap, which is covered by committed loans and grants from the EC, US and other donors, as well as the resources provided by the Fund.

Further improving governance in Ukraine is not only critical to the success of the IMF supported program but also indispensable to promote public trust and donor confidence in Ukraine’s reconstruction efforts, which be key to enable the country to achieve recover and grow in the future.
That is why measures to strengthen the rule of law and the fight against corruption are crucial components of this new program with Ukraine.
As part of this effort, a new head of Ukraine’s National Anti-Corruption Bureau was selected in the context of a competitive, open and robust selection process prior to the approval of the program by the IMF Executive Board. Further reforms are ongoing to help enhance the autonomy and effectiveness of anti-corruption bodies, put in place a targeted restoration of asset declarations and ensure effective implementation of the AML/CFT framework.

The Fund is always looking at ways it can improve its policies, frameworks, and lending tools to ensure that it is fit for purpose, and it is providing the best support possible to its member countries. In that spirit, and in an effort to better serve all its 190 members, the IMF Executive Board approved changes to the Fund’s Financing Assurance Policy.
The changes to the Financing Assurances policy were introduced to ensure that the Fund can provide program financing support for countries in circumstances of exceptionally high uncertainty – including in cases of armed conflict like that faced by Ukraine - to resolve their balance of payments problems and restore medium term external viability in a way that is consistent with the IMF’s legal and policy frameworks and with adequate safeguards for the IMF’s resources.

The changes to the Financing Assurances policy apply to all members of the IMF and not just one country.
However, circumstances of exceptionally high uncertainty are rare, and befitting the challenge of such a circumstance it is not simple to successfully meet the requirements of the new policy.

This is the first time that the Fund has applied a new approach to lending to countries which face exceptionally high uncertainty.
The IMF Executive Board recently approved changes to its Financing Assurances policy to help support country’s facing exceptionally high levels of uncertainty, including for cases of active conflict like Ukraine.

These changes are designed to address how the IMF can support countries in circumstances of exceptionally high uncertainty to resolve their balance of payments problems and restore medium term external viability in a manner consistent with the IMF’s legal and policy frameworks and with adequate safeguards over the IMF’s resources.
Under the previous lending framework, the IMF typically only provided financial support post conflict or through emergency assistance – like the Fund did for Iraq (2006) or Ukraine (2022).