The Executive Board of the International Monetary Fund (IMF) has approved a disbursement of US$1.4 billion (582,176,000,000.00 Nigerian Naira) under the Rapid Financing Instrument (RFI) to help meet urgent financing needs and reduce the war’s economic damage in Ukraine.
The global lender made this disclosure on Wednesday, March 9, 2022 in a press release titled “IMF Executive Board Approves US$ 1.4 Billion in Emergency Financing Support to Ukraine”
Expressing its strong support for the Ukrainian people, the IMF noted that the war in Ukraine is resulting in tragic loss of life and human suffering, stating that the economic consequences are already very serious, with over 2 million people fleeing the country in just 13 days not to mention the large-scale destruction of key infrastructure in Ukraine.
Key takeaway on why IMF approved emergency funding to Ukraine
The IMF stated that this disbursement 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.
It added that the Ukrainian authorities had already cancelled an existing stand-by lending arrangement with the IMF and the have expressed their intent to work with the IMF to design an appropriate economic program aimed at rehabilitation and growth, when conditions permit.
Following the Executive Board discussion, Ms. Kristalina Georgieva, Managing Director and Chair of IMF said:
“Russian military invasion of Ukraine has been responsible for a massive humanitarian and economic crisis,” in a statement after the meeting, predicting a deep recession in Ukraine this year.
“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,” she added.
She concluded by stating that 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 and IMF will remain closely engaged with the Ukrainian authorities.