Money will last until May: IMF loan gives Ukraine time despite EU aid blocking

After the International Monetary Fund's (IMF) decision on a new loan, Ukraine received a financial reserve that will allow it to cover budget needs at least until the beginning of May. This gives the European Union more time to resolve the issue of blocked aid of EUR 90 billion, which is being held up by Hungary.

This is reported by Politico. According to sources familiar with the financial situation in Kyiv, the country's cash reserves and military reserves have turned out to be more stable than politicians previously assumed. Previously, there were fears that state finances could run out by the end of March, as this year's budget deficit was estimated at at least USD 50 billion.

The situation was partially changed by the IMF's decision in February to provide Ukraine with a loan of USD 8.1 billion. Of this amount, USD 1.5 billion was transferred almost immediately, which allowed stabilizing the financing of state spending.

Meanwhile, the European Union agreed back in December to provide Ukraine with EUR 90 billion in aid to support its defense against russian aggression. However, Hungary blocked this decision, accusing Kyiv of delaying the repair of the Druzhba oil pipeline for political reasons.

Despite this, additional funds from the IMF allow the EU to buy time to find a compromise with Budapest. Brussels suggests that the issue of a large aid package can be returned to after the parliamentary elections in Hungary, which are due to be held in April.

At the same time, the Netherlands announced its intention to continue supporting Ukraine on a bilateral level: according to the country's Finance Minister Elko Heinen, an annual allocation of about EUR 3.5 billion in aid is planned until 2029.

As Ukrainian News Agency earlier reported, at the end of February, the Board of Directors of the International Monetary Fund approved a new four-year Extended Fund Facility (EFF) for Ukraine for USD 8.1 billion.