Kyiv may tighten monetary policy and impose currency restrictions if IMF does not give next tranche

The National Bank of Ukraine (NBU) warned that it may tighten monetary policy and impose currency restrictions if the International Monetary Fund does not release a fifth tranche to Ukraine.

"We have been talking through the possible scenarios in the case there is no tranche. If inflationary pressures increase, it will strengthen our monetary tools to contain inflation. We will impose certain restrictions on potential capital outflows," NBU Governor Yakiv Smoliy told journalists on Thursday.

At the same time, he expressed hope that such a scenario will not transpire and that Ukraine will fulfill its obligations to the IMF.

"We expect that the law on the Anti-Corruption Court will be adopted in June. Then, the process of the mission’s arrival [and] revision of the program will begin," he said.

The National Bank earlier announced the need to continue reforms within the framework of the IMF lending program, as access to global capital markets, through which Ukraine expects to attract additional financing by floating Eurobonds, has recently become more complicated.

One of the key requirements of the IMF is the creation of the Anti-Corruption Court, but the Verkhovna Rada has not yet passed the necessary law. One of the permanent speakers for the Petro Poroshenko Bloc "Solidarity", which is the presidential party, said that the IMF is using this law as an excuse to stop lending to Ukraine.

  IMF, IMF tranche, anti-corruption court