The International Monetary Fund on Wednesday disbursed $1.4 billion to Ukraine to help mitigate the effects of the ongoing war. Photo by Ukrainian State Emergency Service/ UPI | License Photo
March 9 (UPI) -- The executive board of the International Monetary Fund approved the disbursement of $1.4 billion in emergency financing support to Ukraine to help cover urgent needs and mitigate the effects of the ongoing war.
The money will be disbursed under the Rapid Financing Instrument, which is available to member countries to meet urgent balance of payment needs in times of crisis, and equals to about 50% of Ukraine's quota in the IMF, the global lender said in a release emailed to UPI.
The IMF added that Ukraine has canceled its existing stand-by lending arrangement to work with the lender on an appropriate economic program to rehabilitate and grow the country "when conditions permit."
The IMF with the World Bank announced last week that it was working on a package for Ukraine, and the money released Wednesday is on top of the $700 million the IMF disbursed to Ukraine in December and the $2.7 billion provided in IMF Special Drawing Rights it received in late summer.
The World Bank on Monday also approved a $723 million loans and grants package for Ukraine to help it provide critical services, including wages for hospitals workers, pensions and social programs.
Ukraine had requested the funds through the IMF's RFI amid its ongoing war with Russia that erupted following the Kremlin's invasion of the Eastern European country late last month.
According to United Nations data, at least 406 Ukrainian civilians have been killed and 801 injured as of midnight Tuesday and more than 2.1 million have fled the country.
Kristalina Georgieva, managing director, said Ukraine's financing needs "are large urgent and could rise significantly as the war continues."
She also complimented Kyiv's emergency policy response to the war as having been "remarkable."
Among its financial moves, Ukraine has introduced measures to preserve that ability of foreign exchange reserves and reduced uncertainty of the exchange rate. Its national bank established a new liquidity facility and introduced regulatory forbearance measures, and despite limiting cash withdrawals it has not done the same for cashless transactions.
It has also maintained all its debt obligations, she said.
"Against this extraordinary background, the IMF has approved critical financial support," Georgieva said. "This should be instrumental in catalyzing the large-scale mobilization of additional concessional financing that will be required to help fill the financing gap and mitigate the economic impacts of the war."
Once the war is over and a damages assessment has been performed, additional support is expected to be provided, she said.
"The fund expresses its deepest sympathy to the Ukrainian people in these extraordinarily difficult times and will remain closely engaged with the Ukrainian authorities."