International Monetary Fund

Taehan Lee

The International Monetary Fund (IMF) organizes and works to reach prosperity and continuously grow for all 190 countries by keeping up economic policies that encourage financial stability and monetary cooperation. These are necessary to increase productivity, job creation, and economic contentment

The IMF is to observe the following; IMF suggests policies to countries to support growth and financial stability, they research any dangerous risks that would harm global economic developments and monitor the international monetary system Additionally, the IMF inspected the economic well-being and financial policies of all 190 countries.

Furthermore, ‘The board of Governors’ are situated at the highest point of organizational structure in charge of the IMF staff and the managing director who acts as the chair of the executive board. . The head of the IMF staff and the Chair of the Executive Board is the managing director The IMF’s regular work routine is supervised by the entire membership and supported by IMF staff which represents the 24-member Executive Board.

The IMF’s current goal is to continuously expand trading and economic growth, discouraging policies to prevent harm to prosperity and further growth of international monetary cooperation.

The staff-level of agreement on a set of macroeconomic and financial policies have been reached by IMF members and Ukrainian authorities which would be provided by Extended Fund Facility (EFF) Arrangement

International Monetary Fund (IMF)

“The staff-level agreement reflects the IMF’s continued commitment to support Ukraine and is expected to help mobilize large-scale concessional financing from Ukraine’s international donors and partners over the duration of the program.”

“In addition to the horrific humanitarian toll, Russia’s invasion of Ukraine continues to have a devastating impact on the economy: activity contracted by 30 percent in 2022, a large share of the capital stock has been destroyed, and poverty levels have climbed Acute macroeconomic challenges persist due to the scale of the shock and the expansion of the fiscal deficit. The authorities have nevertheless managed to maintain macroeconomic and financial stability, thanks to substantial external support and skillful policymaking. The authorities’ commitment to good economic management was also evidenced by the strong performance under the Program Monitoring with Board Involvement (PMB) (Press Release 23/46).”

“A gradual economic recovery is expected over the coming quarters, as activity recovers from the severe damage to critical infrastructure, although headwinds persist, including the risk of further escalation in the conflict. Developing a single baseline outlook scenario under exceptionally high uncertainty is exceedingly challenging, as a range of outcomes are plausible. On that basis, staff currently sees real GDP growth for 2023 ranging from -3 to +1 percent”

“The overarching goals of the authorities’ program are to sustain economic and financial stability in circumstances of exceptionally high uncertainty, restore debt sustainability, and support Ukraine’s recovery on the path toward EU accession in the postwar period The program has been designed in line with the new Fund's policy on lending under exceptionally high uncertainty, and strong financing assurances are expected from donors, including the G7 and EU In view of the exceptionally high uncertainty, the requested IMF-supported program envisions a two-phased approach:

International Monetary Fund (IMF)

The first phase, currently envisioned during the first 12-18 months of the program, will build on the PMB, to strengthen fiscal, external, price and financial stability by (i) bolstering revenue mobilization, (ii) eliminating monetary financing and aiming at net positive financing from domestic debt markets, and (iii) contributing to long-term financial stability, including by preparing a deeper assessment of the banking sector health and continuing to promote central bank independence. New measures that might erode tax revenues will be avoided The authorities are also committed to continuing reforms to strengthen governance and anti-corruption frameworks, including through legislative changes

The second phase would shift focus to more expansive reforms to entrench macroeconomic stability, support recovery and early reconstruction, and enhance resilience and higher long-term growth, including in the context of Ukraine’s EU accession goals. During the second phase, Ukraine would be expected to revert to prewar policy frameworks, including a flexible exchange rate and inflation-targeting regime In addition, fiscal policies would focus on critical structural reforms to anchor mediumterm revenues through the implementation of a national revenue strategy, together with strengthening public finance management and introducing public investment management reforms to support post-war reconstruction Enhancing competition in the vital energy sector, while reducing quasifiscal liabilities would complement the postwar reform efforts.

“The mission met with NBU Governor Pyshnyy and Finance Minister Marchenko, and other senior public officials, and would like to thank the authorities for the open and constructive discussions and the close collaboration that have brought us to today’s staff-level agreement.”

Bibliography

LOUIS, M. E. E. R. A. (2023, March 21). IMF and Ukrainian authorities reach staff level agreement on a US$15 6 Billion extended fund facility (EFF) arrangement IMF Retrieved April 2, 2023, from https://www.imf.org/en/News/Articles/2023/0 3/21/pr2388-ukraine-imf-and-authoritiesreach-staff-level-agreement-eff-arrangement