Ukraine’s Interest Payments on IMF Loans to Decrease: IMF Revises Its Charges and Surcharge Policy

The National Bank of Ukraine welcomes the IMF Executive Board’s conclusion of its Review of Charges and the Surcharge Policy.
The IMF Executive Board made this decision on 11 October 2024.
The changes will take effect on 1 November 2024 and will be valid for the next five years.
The approved measures will lower IMF borrowing costs for members by an average of 36%, or about USD 1.2 billion annually.
For Ukraine, however, borrowing costs will decrease more significantly, by about 38%–39%, as the country is one of the IMF’s largest borrowers.
"In meetings with the Fund’s management, Ukrainian authorities, including NBU representatives, have repeatedly raised the need to review the surcharges on IMF loans.
We are grateful to the IMF for the decision it made, and for the steady, unwavering financial, political, and expert support.
The changes to the Review of Charges and the Surcharge Policy will make it possible to reduce Ukraine’s interest payments to the Fund by about USD 130 million in 2025, and will in general save Ukraine about USD 650–700 million over the next five years," said NBU Governor Andriy Pyshnyy in his comment on the IMF’s decision.
The expected number of countries subject to surcharges in fiscal year 2026 will fall from 20 to 13.
This is achieved by reducing the margin over the SDR interest rate, raising the threshold for level-based surcharges, lowering the rate for time-based surcharges, and increasing the thresholds for commitment fees.
"This reform helps ensure that the IMF can continue serving our members in a changing world," said IMF Managing Director Kristalina Georgieva in a statement on the Review of Charges and the Surcharge Policy.
Background: On 31 March 2023, the IMF Executive Board approved a four-year Extended Fund Facility arrangement for Ukraine.
The program is being implemented in two stages (wartime and post-war).
It provides access to SDR 11.6 billion (equivalent to USD 15.6 billion) in IMF loan financing.
Disbursements under the program are conditional on review results.
In 2023, Ukraine received from the IMF three disbursement worth a total of SDR 3.3 billion (USD 4.5 billion).
This year, Ukraine has already received from the IMF two disbursements worth SDR 2.3 billion (equivalent to about USD 3.1 billion) in total.
Overall in 2024, Ukraine could receive up to four disbursements worth SDR 4 billion (equivalent to USD 5.4 billion).
The IMF mission that conducted the fifth review of the Extended Fund Facility (EFF) program with Ukraine in Kyiv during 4–10 September 2024 has concluded its work.
A Staff-Level Agreement (SLA) has been reached as a result of the mission.
The agreement is subject to approval by the IMF Executive Board, which is expected to consider the agreement this week.
Such an approval will pave the way for Ukraine to access SDR 834.8 million (equivalent to approximately USD 1.1 billion) in funding.