Friday, July 27, 2018

Scenes from a monetary marriage: What will happen with Ukraine if the International Monetary Fund walks away?

For more than a year now, Ukraine has not received any tranches from the International Monetary Fund. Time keeps passing, the country’s need for funding keep growing, and as elections loom, Ukraine’s politicians keep losing their ability, or desire, to meet the inexorable conditions of the country’s main lender. The result is that some are predicting an inevitable crisis, default, and UAH 50 to the dollar, while others talk about the “insatiable monster” that keeps interfering in Ukraine’s internal affairs and exercising “outside influence” over the country. Of course, Ukraine’s political class cannot live without exaggerating reality. But it leads to this question: what really awaits Ukraine if it fails to restore financial relations with the IMF?

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