The Managing director of the International Monetary Fund (IMF) Ms. Kristalina Georgieva, has restated the firm commitment of her organization to supporting Ukraine in the current war occasioned by the invasion of that country by Russia.
She spoke, yesterday, during a meeting hosted by Ukraine, on the sidelines of the on-going IMF/World bank Spring Meetings.
The MD described the Russian invasion as a human tragedy, having brought unprecedented sufferings to Ukrainians , with thousands killed or injured and millions displaced.
She said, “We are here today to demonstrate our firm commitment to support Ukraine in its hour of need.
“Russia’s invasion of Ukraine is first and foremost a human tragedy that has brought unimaginable human suffering to ordinary men, women, and children.
“Thousands have been killed or injured. Millions have been forced from their homes. They are foremost in our thoughts.”
Ms. Kristalina said that the economy of Ukraine had been devastated and needed global assistance, while praising the authorities for being able to ensure the relative stability of its currency, despite the war.
According to her, “ It is also devastating for the Ukrainian economy. The losses of physical infrastructure and human capital are already huge and will lead to a deep recession this year..
“On Tuesday this week, the IMF published its World Economic Outlook that projects Ukraine’s GDP to shrink by almost 40 percentage points. This underlines the importance of our shared determination to help the government and people of Ukraine meet the steep economic challenges they face.
“First, let me reiterate what we have been saying from Day 1: the emergency economic and financial policy response by the Ukrainian authorities has been remarkable.
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“They have acted decisively to preserve the availability of foreign exchange reserves and reduce exchange rate uncertainty. They have supported financial stability and protected priority budget payments.
“And they ensured that people in Ukraine can still access the services and the cash they need. In the midst of the invasion, these actions have helped avoid the economic shocks that often accompany wars, such as hyperinflation and currency devaluation.
“My second point is the importance of external finance in supporting these actions, including from bilateral donors and the multilateral institutions like the World Bank.
“The IMF has played its part—through a $1.4 billion Rapid Financing Instrument that was agreed less than two weeks after the invasion. And last week we established an Administered Account for Ukraine that will provide donors with a secure vehicle to direct financial assistance to Ukraine.
“Here, I would like to thank Canada, whose recent federal budget proposed up to CAD 1 billion be disbursed to Ukraine through the Administered Account. It is financing like this—together with careful controls on cross-border operations since February 24—that has kept the central bank’s foreign exchange reserves stable relative to the pre-war level.
“On the fiscal side, it has supplemented domestic revenues without excessive recourse to monetary financing. But as important as these macroeconomic outcomes are, we should not be lulled into a sense that the biggest challenges are over.”
