In QE we trust. Zelenskiy reports disagreements with the IMF

UKRAINE - In Brief 22 Feb 2021 by Dmytro Boyarchuk
President Volodymyr Zelenskiy claimed some disagreements with the IMF, when speaking at Forum “Ukraine 30”. In particular, he mentioned the Fund has multiple comments to the draft law on the High Council of Justice he submitted to the parliament recently. Reload of the High Council of Justice is crucial to reboot the judicial system. IFIs and anti-corruption activists insist that international experts should have dominating role in the process of the HCJ reload. But Zelenskiy, for now, is talking about independence in this story. “We are building independent Ukraine,” - said the president. “We are building a strong country, independent of anyone in the future,” stated Zelenskiy emphasizing that he is not friendly to the idea of allowing foreigners controling the HCJ reload. Zelenskiy hopes Ukraine will receive next wire from the IMF this year. But he also stated the authorities have ‘plan B’ if no progress with the IMF observed. Recall, the virtual mission of the IMF ended ‘no results’ on Feb 13th. However, despite negative news on this front, non-residents keep buying UAH-denominated state securities. On the week of Feb 15th, when the IMF already reported no staff level agreement, non-residents increase their exposure on UAH state bonds by extra $100 million. Against this backdrop there is no surprise President Volodymyr Zelenskiy feel relaxed about being hard on negotiations with the Fund. We keep our view that no agreement will be reached in 1H 2021 amid abundant liquidity globally. Possibly there might be some progress in 2H 2021.

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