The executive board of the International Monetary Fund on Friday approved a four-year $15.6 billion loan program for Ukraine, part of a broader $115 billion international support package to help the country meet its funding needs in the wake of Russia’s invasion.
The decision clears the way for an immediate payment of about $2.7 billion to Kyiv, the Fund said in a statement.
The Extended Fund Facility (EFF) loan is the first major financing program approved by the IMF for a country involved in a war. Ukraine’s previous $5-billion IMF program expired last year.
“Russia’s invasion of Ukraine continues to have a devastating economic and social impact,” IMF First Deputy Managing Director Gita Gopinath said in a statement.
Ukrainian President Volodymyr Zelenskiy welcomed the new funding.
“It is an important help in our fight against Russian aggression,” he said on Twitter. “Together we support the Ukrainian economy. And we are moving forward to victory!”
The agreement is expected to help unlock financing for Ukraine from international donors and partners, including the World Bank and other lenders.
The $115 billion package includes the IMF loan, $80 billion in pledges and loans from other countries and $20 billion worth of debt relief commitments.
“I welcome the IMF approval of a $15.6 billion economic program for Ukraine,” U.S. Treasury Secretary Janet Yellen said in a statement late Friday. “I commend Ukraine’s efforts to pursue broad-based structural reforms under the program despite Russia’s brutal and immoral war and strongly support the program’s measures aimed at securing economic and financial stability. The program’s policies and reforms will support economic growth, strengthen good governance and anti-corruption efforts, and set the foundation for longer-term reconstruction.”
Some of Ukraine’s creditors, such as Canada, France, Germany, Japan, the UK and the US, supported the deal which required the IMF to change its rules by giving assurances that they would extend a debt-repayment standstill for the duration of the program.
The Russian invasion, launched over a year ago, has devastated Ukraine’s economy and infrastructure, killing thousands of people and driving more than a third of a pre-war population of 40 million from their homes.
This article was originally published by Marketwatch.com. Read the original article here.