| 28 September 2022, Wednesday |

IMF ready to aid countries hit by Russia-Ukraine spillovers, Georgieva says

The International Monetary Fund is ready to assist nations harmed by any spillover consequences from a Russia-Ukraine conflict and Western government sanctions, said International Monetary Fund Managing Director Kristalina Georgieva on Wednesday.

At a Washington Post Live event, Georgieva stated that sanctions will certainly disrupt some financial transactions and financial system functioning, particularly if penalties restricted Russian access to the SWIFT financial transaction network.

“Of course, we would be present if there were spillover effects that necessitated further IMF involvement for other countries. We still have roughly $700 billion in loan capacity “Georgieva explained.

The IMF head expressed optimism for a diplomatic solution to the situation for the benefit of the Ukrainian people as well as the need to preserve global economic recovery.

The conflict has pushed up energy prices, particularly in Europe, and a disruption in grain shipments from Ukraine might add to the increasing pressure on food prices. Gita Gopinath, the IMF’s First Deputy Managing Director, stated last week that an exacerbated Russia-Ukraine war would keep inflation high for a longer period of time.

According to Georgieva, the IMF has around $2.2 billion available in its extended loan agreement with Ukraine, which may be delivered between now and June. In November, Ukraine got a first $700 million tranche.

“Under this program. Ukraine has been acting responsibly to build up reserves, it has also benefited from the Special Drawing Rights allocation that we have done last year. And in that sense, we see our avenue to support specifically the Ukrainian economy quite clear over the next month,” she said.

The IMF will help assess the impact from any conflicts and make prudent policy recommendations to member countries as the crisis unfolds, she said.

Georgieva, who grew up in Bulgaria during the Cold War, said her brother was visiting family in Ukraine and reported empty store shelves and anxious citizens, reminiscent of that era.

“So when we talk about geopolitical tensions, we need to remember it is ordinary people who bear the brunt of their impact,” she said. “And if we can prevent a repeat of what we know was painful for so many, hundreds of millions of people, that would be a very noble objective.”

  • Reuters