The IMF may soon resume lending under a $2.6 billion program interrupted in September 1999, when the country fell out of compliance with the Fund’s macroeconomic conditions. Since then, Ukraine has been through presidential and parliamentary elections that have increased executive authority and reduced the left-wing bloc in parliament to a relatively ineffectual minority. Talks between Fund officials and the Ukrainian delegation to last week’s IMF meetings in Prague focused on the proposed 2001 budget, which includes on the revenue side about $2 billion from privatization of state assets. Since privatization sales so far this year have brought in less than $500 million, Fund officials have some questions about the soundness of the 2001 figure.

For the National Bank of Ukraine, the country’s central bank, the IMF seal of approval cannot come too soon. The Ukrainian hryvnya is drifting lower and is now trading at around 5.57 to the dollar. The NBU would like to buy up hryvnyas to stabilize the rate, hold down import costs, and restrain inflationary pressures, but its reserves of foreign exchange are now less than $1.1 billion. That is not enough to launch a serious defense of the hryvnya–and traders know that a defense that is not serious is worse than none at all.