The International Monetary Fund (IMF) approved a $ 1.4 billion emergency loan to Ukraine on Wednesday to mitigate the economic consequences of Russia’s invasion of President Vladimir Putin.
“Russia’s military invasion of Ukraine has caused a major humanitarian and economic crisis,” IMF Managing Director Cristalina Georgieva said in a statement after the Fund’s board of directors. Said.
Georgieva predicted a serious recession in Ukraine this year in the midst of “tragic loss of life, huge influx of refugees, and devastating destruction of infrastructure and capacity.”
“The demand for money is great, urgent, and can increase significantly as the war continues,” she said. After the war, Ukraine is likely to need additional “massive support,” she said.
In a statement, the IMF is funded from its Rapid Financing Instrument (RFI), helping to facilitate funding from other partners while at the same time funding urgent spending needs in the short term. Said.
The RFI provides swift funding to IMF member countries without the need for a full-fledged program. According to the IMF website, members will be able to use the RFI repeatedly within three years if the need for a balance of payments is caused by an extrinsic shock.
“The war in Ukraine has resulted in tragic loss of life and human suffering. The outlook is very uncertain, but the economic impact is already very serious,” he said.
Georgieva and the Fund said the IMF and its board of directors continued to work closely with Ukrainian authorities to express sympathy and “strong support for the Ukrainian people.”
Global lenders said Ukrainian authorities have canceled their existing standby loan agreement with the IMF, but will work with the Fund to design an appropriate economic program focused on rehabilitation and growth, if conditions permit.
Russia’s executive director Alexei Modin, a senior member of the board and dean of the Honorary Department, briefly told board members “pray for peace,” Reuters reported.
World lenders have pointed out that more than 2 million Ukrainians have fled the country since Putin launched a full-scale invasion of the country on February 24, and Russia’s invasion is already very serious. He said that he had a good result.
Putin describes the invasion as a “special military operation” to disarm Ukraine and detain leaders who claim to be neo-Nazis. Ukraine and the West claim that this is a false excuse used to justify the aggression.
In December, the IMF paid Ukraine $ 700 million, and in August Ukraine received $ 2.7 billion in IMF Special Drawing Rights or Emergency Reserves.
On Monday, the World Bank announced a package of over $ 700 million in emergency funding for Ukraine.
Reuters contributed to this report.
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Isabel van Brugen is an award-winning journalist and currently a news reporter for The Epoch Times. She holds a Master’s degree in Newspaper Journalism from City University of London.