Ukraine President Volodymyr Zelenskiy spoke with International Monetary Fund Managing Director Kristalina Georgieva about greater financial support as the eastern European faces a possible crisis due to the coronavirus.
“We discussed increasing the amount of support for Ukraine from the Fund during a time of significant challenges for the economy associated with the global pandemic,” Zelenskiy said in a statement on March 22.
Ukraine has been in talks with the IMF for months about a three-year, $5.5 billion loan tied to reforms to help the country meet a jump in debt repayments this year.
Kyiv however has dragged its feet on passing the legislation — which includes a bank law that would prevent tycoons from regaining control over banks that were bailed out with public funds — and the funds have yet to be released.
Now, Ukraine is likely to need to borrow even more money internationally as it increases spending to fight the spread of the coronavirus and support companies and individuals negatively affected by the potential economic fallout.
The country’s Health Ministry said the number of new coronavirus cases jumped by 26 on March 22 bringing the nationwide total to 73. And Kyiv is closing all public transportation for non-critical personnel on March 23.
Some economists have said Ukraine may need to borrow as much as $10 billion.
However, the recent surge in borrowing rates for some emerging market countries due to the pandemic has effectively shut Ukraine out of international bond markets, making access to IMF loans even more vital.
The IMF earlier this month set up a separate $50 billion emergency financing program specifically for low-income and emerging market countries like Ukraine to help them deal with the impact of the coronavirus.
Ukraine is eligible for a loan under that IMF program whose conditions would differ from those attached to the $5.5 billion lending program.
Georgieva said the call with Zelenskiy was “constructive” and expressed support for Ukraine, but gave no indication the fund would ease its reform demands before releasing the pending $5.5 billion loan.