View of a civilian building damaged following a Russian rocket attack the city of Kyiv, Ukraine (Alamy)
The International Monetary Fund (IMF) considers providing Ukraine with $2.2 billion in financial assistance amid military conflict in the country.
Russia launched its long-feared attack on Ukraine, striking major cities and strategic sites over a wide geographical area in an operation described by Kremlin leader Vladimir Putin as a swoop to “demilitarise and denazify” but not to occupy its ex-Soviet neighbour.
“The Fund has a number of instruments in its toolkit and, as the situation in Ukraine evolves, we will continue to discuss with the authorities how we can best assist them … In addition to ongoing policy advice, we are exploring all options for further financial support, including under the existing Stand-By Arrangement (SBA) for an outstanding amount of $2.2 billion. The authorities have also requested IMF emergency financing,” Kristalina Georgieva, the IMF managing director, said in a statement.
She said that the Fund would continue to support Ukraine in every possible way.
“We will also continue to work hand in hand with the World Bank Group and other partners to coordinate our support and ensure the maximum benefit for Ukraine,” Georgieva said.
“Beyond Ukraine, the repercussions of the conflict pose significant economic risks in the region and around the world. We are assessing the potential implications, including for the functioning of the financial system, commodity markets, and the direct impact on countries with economic ties to the region. We stand ready to support our members as needed, in close coordination with our international partners,” she added.
In November 2021, the International Monetary Fund, following the first review of the SBA programme, agreed on the allocation of a loan tranche to Ukraine in the amount of about $700 million.
International donors and Ukraine’s partners also pledged support to the country.
The United Kingdom said it would allocate loans of up to $500 million to support Ukraine and mitigate the economic consequences of Russian aggression.
Britain is ready to offer guarantees to the Multilateral Development Bank (MDB) for projects that support economic stability and vital reforms such as the fight against corruption. This support will help mitigate the financial impact on Ukraine’s economy resulting from Russian aggression.
The United Kingdom is also ready to provide Ukraine with a new military support package, said Prime Minister Boris Johnson. The aid package would include defence weapons and non-lethal aid. The Prime Minister added that Britain is also ready to strengthen sanctions, emphasizing the scale of the package of sanctions already outlined, which includes 275 people.
Italy is also considering sending aid to Ukraine in support of its economy, as well as non-lethal military assistance, Luigi Di Mayo, Italy’s foreign minister, said.
Di Mayo said the government was ready to allocate 110 million euros to support “the Ukrainian population and economy in areas that will be agreed upon with the Kyiv authorities,” according to the Italian newspaper IL Foglio.
Among the non-lethal equipment that Italy plans to send to the armed forces of Ukraine may be demining equipment, the minister said.
Di Mayo also said that Italy would work to minimize the impact on its economy and strategic interests from any sanctions imposed on Russia by the West.
Last week, the World Bank Group said it was ready to allocate $350 million to Ukraine as part of a plan for short- and long-term financing for the country.
The country’s partners have already pledged over $5 billion in financial aid in a move to support Ukraine’s economy and reform agenda amid anticipation of a military conflict with Russia. Funds include loans and grants from the U.S., Canada, Japan, France, Sweden and other countries. Last month, the EU proposed a 1.2 billion euro financial aid package to Kyiv to mitigate the effects of the conflict with Moscow. Washington boosted its support by offering a sovereign loan guarantee of up to $ 1 billion to support Ukraine’s economic reform agenda.
