The International Monetary Fund (IMF) says its executive
board has approved $1.4 billion in emergency financing to support Ukraine amid
the ongoing war with Russia.
The Washington-based institution, in a statement, said the
executive board gave its approval on Wednesday night.
According to IMF, the support comes from its rapid financing
instrument (RFI).
The RFI provides rapid financial assistance available to all
IMF member countries facing an urgent balance of payments need.
While expressing its strong support for the Ukrainian
people, IMF said the economic consequences of the war are already very serious,
with refugee flows of over 2 million persons in just 13 days and large-scale
destruction of key infrastructure in Ukraine.
“This disbursement under the RFI, equivalent to 50 percent
of Ukraine’s quota in the IMF, will help meet urgent balance of payment needs
arising from the impacts of the ongoing war and will provide critical support
in the short term while playing a catalytic role for financing from other
partners,” the IMF said.
The global lender said Ukrainian authorities had cancelled
an existing stand-by lending arrangement with the IMF but would work with the
fund to design an appropriate economic program focused on rehabilitation and
growth when conditions permit.
Kristalina Georgieva, IMF managing director, said the
Russian military invasion of Ukraine has been responsible for a massive
humanitarian and economic crisis.
She said the “tragic loss of life, huge refugee flows, and
immense destruction of infrastructure and productive capacity is causing severe
human suffering and will lead to a deep recession this year.”
“Financing needs are large, urgent, and could rise
significantly as the war continues.”
Georgieva said the financial support should help fill the
financing gap and mitigate the economic impacts of the war.
“Once the war is over
and a proper damage assessment can be performed, additional large support is
likely to be needed to support reconstruction efforts,” she added.
The IMF boss also commended the emergency policy response of
the Ukrainian authorities, describing it as “remarkable”.
She added that the IMF would remain closely engaged with
Ukrainian authorities.
On Monday, the World Bank also approved a $723 million
package of loans and grants for Ukraine.
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