WASHINGTON, March 10 (Reuters) – The International Monetary Fund (IMF) said its board on Wednesday approved $1.4 billion (1.2 billion euros) in emergency funding for the Ukraine to help the country meet urgent expenses and mitigate the economic impact of Russia’s military invasion.
The IMF said the Ukrainian authorities had canceled an existing Standby Credit Facility (SCF) arrangement, but would work with the Fund to design an appropriate economic program focused on rehabilitation and growth when conditions allow.
“The Russian military invasion of Ukraine is responsible for a major humanitarian and economic crisis,” IMF Managing Director Kristalina Georgieva said in a statement, predicting a major recession in Ukraine this year.
“Funding needs are large, urgent, and could increase significantly as the war continues,” she added. Once the war is over, Ukraine will likely need additional “significant support”.
The IMF has indicated that the war is already having serious consequences, such as the flight from Ukraine of 2 million people in the space of 13 days or the destruction of key infrastructure.
The disbursement under the IMF’s Rapid Financing Instrument (RFI), equivalent to 50% of Ukraine’s quota, will help fund short-term urgent spending needs, while helping to catalyze financing for other partners, the IMF said.
The RFI provides rapid financing to IMF member countries without the need to set up a full-fledged program. Members can call on the IFR multiple times over a three-year period if the balance-of-payments need is caused by an exogenous shock, according to the IMF’s website.
(Report Andrea Shalal, with David Lawder; French version Camille Raynaud)