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Is Ukraine on Thin Ice with the IMF?

Sim Tack
Senior Global Analyst , Stratfor
Michael Monderer
Senior Analyst for Global Economics, Stratfor
Jul 29, 2020 | 10:00 GMT
Ukraine's new central bank chief, Kyrylo Shevchenko, wears a face mask as he watches lawmakers vote on his candidacy during a parliamentary session on July 16, 2020.

Ukraine's new central bank chief, Kyrylo Shevchenko, wears a face mask as he watches lawmakers vote on his candidacy during a parliamentary session on July 16, 2020.

(ANDRII NESTERENKO/POOL/AFP via Getty Images)

A potential falling out with the International Monetary Fund (IMF) over monetary policy and independence of the National Bank of Ukraine (NBU) would be highly damaging, but not catastrophic, to Ukraine's economic recovery efforts. The economic fallout from COVID-19 has made Kyiv heavily dependent on the bailout money it's receiving from the IMF, as well as the European Union. The IMF has placed Kyiv on a fairly short leash, warning that the recent appointment of Kyrylo Shevchenko -- an advocate of easier monetary policy and ally of President Volodymyr Zelensky -- raises questions regarding the NBU's independence and possible politicization. Zelensky and Shevchenko's political views are unlikely to cause the IMF to suspend its assistance to Ukraine, though the actions of the NBU will be monitored closely. ...

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