Washington:
The International Monetary Fund said on Wednesday that its board of directors has approved $1.4 billion in emergency funding for Ukraine to help meet urgent spending needs and mitigate the economic impact of the Russian military invasion.
The global lender said Ukrainian authorities had canceled an existing standby loan agreement with the IMF but would work with the fund to design an appropriate economic program focused on rehabilitation and growth when conditions permit.
“The Russian military invasion of Ukraine has been responsible for a massive humanitarian and economic crisis,” IMF director Kristalina Georgieva said in a statement after the meeting, forecasting a deep recession in Ukraine this year.
“Financing needs are high, urgent and could increase significantly as the war continues,” she said. When the war was over, Ukraine probably needed additional “big support”.
The IMF said the war had already had very serious consequences, citing the flight of more than 2 million people from the country in 13 days and the massive destruction of key infrastructure.
Russia describes the attack as a “special military operation”.
The disbursement under the IMF’s Rapid Financing Instrument (RFI), equivalent to 50% of Ukraine’s quota in the IMF, will help fund urgent short-term spending needs, while helping to catalyze funding from other partners , the IMF said.
The RFI provides rapid funding to IMF member countries without the need for a full-fledged program. Members can tap the RFI repeatedly within a three-year period if the balance of payments need is triggered by an exogenous shock, according to the IMF website.
It comes on top of the $700 million paid out to Ukraine by the IMF in December, and $2.7 billion in IMF special drawing rights, or emergency reserves, that Ukraine received in August as part of an IMF allocation.
The World Bank’s board of directors approved a $723 million loan and grant package for Ukraine on Monday.
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