IMF, Ukraine reach staff-level agreement on $8.2 billion, four-year programme

The International Monetary Fund said on Wednesday it reached a staff-level agreement on a new four-year, $8.2 billion program for Ukraine as the country faces mounting wartime fiscal pressures.

The IMF said the agreement, which replaces the existing $15.6 billion Extended Fund Facility approved in March 2023, is meant to help Kyiv maintain macroeconomic stability and strengthen public finances as the war against Russia continues to strain its budget.

"The program is expected to catalyze large-scale external support to close Ukraine’s financing gaps," IMF official Gavin Gray, who led the fund team's visit, said in a statement, adding that the total financing gap is calculated at around $136.5 billion for the 2026-2029 period.

Ukrainian officials have said an IMF programme is key to obtaining financing from other partners, including a reparations loan. Ukraine funnels most revenues towards fending off Russian forces in the fourth year of Moscow's war.

Prime Minister Yulia Svyrydenko said that the agreement showed that her country's economy is resilient despite the war. She pledged to press on with reforms and called for support in passing next year's budget.

"The Government has prepared the 2026 State Budget in line with the framework of the new IMF program," she wrote on X. "We count on the support of Members of Parliament during the vote on the budget as a whole."

The new program can be taken to the fund's Executive Board for approval once prior actions are completed and subject to "adequate financing assurances from donors" according to the IMF.

The European Union has accelerated efforts to agree on a scheme to use frozen Russian assets to help Ukraine after a summit last month failed to agree on a plan to use $162 billion in frozen Russian sovereign assets in Europe as a loan for Kyiv.

The previous IMF program, agreed in 2023 for four years, assumed the war would end late in 2025 and its continuation makes previous analyses, including for debt sustainability, stale. Ukrainian President Volodymyr Zelenskiy said on Tuesday he was ready to advance a US-backed framework for ending the war, with Ukraine wary of being forced into accepting a deal built largely on Russian terms.

Ukraine had so far received about $10.6 billion under its existing program, according to the Finance Ministry. Ukrainian dollar bonds rose earlier in the session, with the 2034, 2035 and 2036 issues up over a cent each in price. The 2034 traded near 45.40 cents on the dollar and the other two were at 56 cents, according to LSEG data.