The International Monetary Fund (IMF) has praised the Ukrainian parliament’s adoption of legislation on banking and land reforms that could unlock billions of dollars in loans.
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 spike in debt repayments this year.
Parliament on March 30 voted to lift a ban on the sale of farmland and approved in the first reading a banking law, although it failed to adopt a revised budget for 2020.
“We welcome the support by the Ukrainian parliament in the first reading of the legislation aimed at strengthening the fundamentals of bank restructuring, and we expect its final adoption,” IMF envoy Goesta Ljungman said in a statement on April 4.
“We also look forward to the adoption of amendments to the budget for 2020, which will help the authorities respond to the extraordinary challenges that have arisen as a result of COVID -19,” Ljungman added.
The banking bill prevents the former owners of banks that were nationalized or liquidated in recent years during a widespread financial-sector clean-up from regaining ownership rights or receiving monetary compensation.
Though the legislation also has other implications for Ukraine’s banks, observers say its main purpose is to prevent one of Ukraine’s most powerful tycoons, Ihor Kolomoyskiy, the former co-owner of PrivatBank, from regaining ownership rights to the bank.
Lawmakers also approved legislation lifting a ban on the sale of farmland, which is expected to unlock enormous investment potential in what is already one of the world’s top grain exporters.
The land market should be opened by July 1, 2021, based on the bill’s provisions.