Central bank deputy head details financial aid Ukraine expects in 2022

13 October 2022, 11:08 AM
Yuriy Heletiy, Deputy Chairman of the National Bank of Ukraine (Photo:NBU press center)

Yuriy Heletiy, Deputy Chairman of the National Bank of Ukraine (Photo:NBU press center)

Ukraine has already received $19.8 billion of external financing this year and expects more than $11 billion by the end of the year, Deputy Head of the National Bank Yuriy Heletiy said in an interview with Interfax-Ukraine news agency published on Oct. 12.

"Perhaps part of it will be transferred next year,” he stated.

“But, taking into account the macro-financial assistance from the EU, the issue raised in the U.S. Congress to allocate additional resources for Ukraine, in particular to ensure fiscal sustainability, we expect significant amounts of international assistance by the end of the year.”

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Commenting on the $38 billion of external financing envisaged in the draft state budget for 2023, Heletiy stressed that the priority for the government and the central bank in this direction in the coming month is to work with the IMF and open a new large program for Ukraine, in addition to receiving another $1.3 billion of emergency financing in the coming days under the RFI facility.

"It can be either EFF (Extended Fund Facility) or Stand-by," said the deputy head of the NBU, who is currently in Washington together with his colleagues from the Ministry of Finance at the annual meeting of the IMF and the World Bank.

“That is, a classic extended program aimed at bridging the balance of payments gap and implementing structural reforms. It will be a kind of benchmark for all international partners. We are actively working on this.”

According to him, the IMF mission will take place in October to discuss a number of issues, including the macroeconomic situation in Ukraine, the 2023 budget, and the exchange rate policy.

"It will be a team with a new head of mission," Heletiy noted. 

“I hope that we will have a fruitful dialogue that will contribute to a better understanding by the IMF of the current challenges for our country, our fiscal and monetary policy.”

At the same time, he added that the IMF program alone is unlikely to suffice, so it is necessary to actively work with other partners, primarily with the European Union, the United States, and other G7 countries.

"The NBU, like no other, is interested in receiving this assistance," the deputy head of the central bank stated.

“It will reduce the need for monetary financing. For us, the termination of budget monetization is a priority.”

According to him, the possibility to stop monetary financing of the budget next year will depend on its final text, the volume of international assistance, and the rhythm of its receipt.

"$38 billion is a difficult and extremely ambitious task. Indeed, if Ukraine receives these funds, there may not be the need for monetary financing," Heletiy said.

Earlier, Finance Minister Serhii Marchenko said at a meeting with U.S. Treasury Secretary Janet Yellen in Washington that Ukraine expects to receive $5 billion from the EU, $4.5 billion from the United States, and $1.3 billion from the IMF by the end of this year.

Within the framework of the IMF and WB meetings on Oct. 12, the second meeting of the ministerial round table on support for Ukraine is scheduled with the participation of heads of international financial organizations Kristalina Georgieva and David Malpass. It will discuss the country's financing needs, priorities to support essential services during the war, as well as priority rehabilitation and reconstruction projects that can be started quickly.

The first meeting of such a round table was held at the spring meeting of the IMF and the WB on April 21. It was stated that Ukraine needs $5 billion per month to finance the state budget deficit in the conditions of the war unleashed by Russia.

The draft state budget of Ukraine for 2023, adopted in the first reading, provides for external financing of the deficit in the amount of $38 billion, or about $3.2 billion per month.

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