I would add in that the IMF likely will also need to review budget plans for 2018, due for presentation over the next week or so, and currently under preparation.
With no IMF mission date set, it will be hard to get the next tranche approved by the October target. The near term objective of the Ministry of Finance will be getting the Eurobond issue/exchange done, which will further bolster the administration's cash position, and easy back on the urgency of getting the IMF deal signed off to release cash. Given the political context, getting IMF money before year end will be a result.
The government likely thinks: the budget, pension reform, possibly an IMF friendly NBU governor, and a bit of privatization (Centrenergo) - with some promises of "will do" something in 2018 on land reform, should be enough for the IMF to give way on completing prior actions (from April) on energy price liberalization, and also agreeing to stall on the anti-corruption agenda.
For me, the latter should be the number one priority for all. It is central to getting growth/investment going. But given the government now is not likely to need IMF cash, and Poroshenko seems increasingly focused on elections, it likely will fall by the wayside, again.
I also sense the issue of the NBU governorship is now being embroiled in the debate about revamping the ruling coalition. There is talk of Yatseniuk's People's Party more formally joining Poroshenko's BPP.
There will be some shuffling of the chairs on the deck, with some deployment of ministerial portfolios. The NBU post might be a "grace and favor" allocation. The prospects of the market's favorite candidate, Lavrenchuk, being appointed are fading. I hope that he has not given his notice yet at Aval.
Interesting now that we have the Poroshenko-Yatseniuk-Avakov-
The West has interesting and difficult choices as to who to support, among a pretty checkered field.
Timothy Ash is senior sovereign strategist for emerging markets at BlueBay Asset Management in London.
Visit of IMF’s Lipton Highlights Unfinished Business for Ukraine
By Daryna Krasnolutska
(Bloomberg) -- This week’s visit of the International
Monetary Fund’s second-in-command has shone the spotlight on how
much Ukraine still has to do under its $17.5 billion bailout.
First Deputy Managing Director David Lipton ended a two-day
trip to Kiev Thursday after meeting with central bank and top
government officials to discuss progress on meeting the
Washington-based lender’s terms for the next aid disbursement.
Ukraine must take further action to switch to rapid growth from
economic stabilization, Lipton told Prime Minister Volodymyr
Hroisman a day earlier.
Repeated delays to the IMF program have thrown into
question the former Soviet republic’s commitment, with old-guard
politicians often unwilling to alter a system from which they
benefit. The last $1 billion loan tranche was transferred in
April, four months late, while the next had been due in the
summer. The government is selling Eurobonds for the first time
since a 2015 debt restructuring. While endorsed by the IMF,
there’s concern the move may weaken resolve to implement the
lender’s policies before elections in 2019.
“There’s a risk reforms will stall in the end,” said Lutz
Roehmeyer, who helps oversee 12 billion euros ($14 billion) at
Landesbank Berlin Investment GmbH. “If you look into the history
of IMF programs, they start with enthusiasm and once reform
fatigue starts we talk first about delays, then stop, then the
end of the program.”
Roehmeyer sees cooperation with the IMF continuing for now
and the delayed fifth tranche arriving eventually. While
Landesbank Berlin Investment holds existing Ukrainian debt, he
said it won’t buy the new bonds “because they’re too long for
Parliament reconvened from summer recess this month and
will vote on legislation to get the IMF program back on track.
To contact the reporter on this story: Daryna Krasnolutska in Kiev at email@example.com