© REUTERSFILE: An explosion after a Russian missile strike is seen in the sky over the city during a Russian missile attack, amid Russia’s attack in Kyiv, Ukraine on Sept. 2, 2024.
An IMF team is set to visit Kiev later this week to review whether the government is hitting targets that include cutting interest rates, strengthening tax-raising efforts, and devaluing the currency. Pursuing these steps is required for Ukraine to receive the next $1.1 billion tranche from a $15.6 billion loan program.
Ukraine's state finances have been backed by around $122 billion in international aid from the US, EU, and IMF. However, Kiev still faces a $15 billion budget gap in 2025 that has not yet been covered by financial commitments from creditors, Prime Minister Denis Shmigal said last month.
To help bridge the deficit, the Washington-based institution is reportedly planning to urge the National Bank of Ukraine to devalue the hryvnia at a faster pace and ease its monetary policy amid moderate inflation, the sources told the news agency. The measures are expected to boost Ukraine's budget revenues in the local currency and make borrowing cheaper for the Finance Ministry.
The regulator has reportedly opposed further depreciation of the national currency, which has lost more than 30% against the US dollar since the escalation of the Ukraine conflict in February 2022. In October, Ukraine's central bank eased the fixed exchange rate as part of a broader effort to support the economy. Allowing the currency to weaken further would challenge the central bank's ability to maintain price stability, the sources said.
In addition, the IMF has reportedly criticized Kiev's tax raising efforts as being too lenient and urged the authorities to consider increasing a broader range of taxes. Raising the value added tax from the current 20% is among the potential proposals, people familiar with the matter told Bloomberg.
The proposed measures are reportedly a serious cause for concern for officials in Kiev, as currency depreciation along with higher taxes would be politically damaging amid wartime mobilization drives, state corruption concerns, constant blackouts, and soaring energy prices.
Comment: If only this was Ukraine's greatest concern, because the West has already: used Ukraine to launder billions; allowed looting of the public finances on an unfathomable scale; permitted the Kiev-junta to sell off its most valuable assets and resources; and used the country to host sinister bioweapon laboratories, as well organ and child trafficking networks.
As noted in the article, whilst the West's pathocrats may feel at liberty to wrench every last drop of wealth from Ukraine, given the seeming increase in videos showing how the public are pushing back against the junta's meatgrinder recruiters, it's possible that the average Ukrainian may soon feel that calling for an end to the war would be preferable.
Contrary to the propaganda media messaging, Russia's SMO may just be one of the best things to happen to parts of Ukraine for decades: