May 7, 2020 / 3:09 PM / in 21 days

UPDATE 1-IMF shifts Ukraine talks to standby arrangement to address pandemic -spokesman

(Adds details on Ukraine talks, details on proposed arrangement)

WASHINGTON, May 7 (Reuters) - The International Monetary Fund said on Thursday it has shifted its discussions with Ukraine to providing an 18-month Standby Arrangement to allow the government more room to respond to the coronavirus pandemic in the near term.

IMF spokesman Gerry Rice told a regular news briefing that at the start of 2020, the Fund and Ukraine had been discussing a more conditional three-year Extended Fund Facility.

But he said they were now discussing the 18-month Standby Arrangement because of “the unprecedented uncertainty surrounding the economic and financial outlook, and the need to focus policy priorities on near-term containment and stabilization.”

In December, Ukraine and the IMF agreed provisionally on a $5.5 billion Extended Fund Facility loan deal, but disbursement was contingent on Ukraine passing banking and land reforms and more anti-corruption measures. IMF Managing Director Kristalina Georgieva said in March that those talks had been progressing well, but the pandemic was increasing uncertainty.

The IMF’s Standby Arrangements are less conditional and allow more flexibility for countries dealing with economic crises. Rice said such an arrangement can provide balance of payments support to reinforce Ukrainian authorities’ response to the coronavirus economic crisis.

“When a recovery is in place, the focus could shift back to addressing Ukraine’s longer-term structural reform needs to foster stronger and more inclusive growth,” Rice said.

Reporting by David Lawder; Editing by Kevin Liffey and Andrea Ricci

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