The International Monetary Fund has agreed at the staff level to release nearly $700 million to Ukraine, despite Kyiv's failure to meet a specific legislative condition, people familiar with the discussions said. Those people asked not to be identified because the talks are private.
Officials indicated the staff-level accord could be announced as early as today, although it still needs formal approval from the IMF board next month. The compromise follows several weeks of negotiations during a recent IMF mission that were complicated when Ukraine's parliament did not pass a piece of legislation requested by the lender.
The bill in question would broaden taxation on foreign parcels, a measure the IMF sought as part of efforts to reduce the size of Ukraine's shadow economy. Under the proposed terms, packages valued above c45 ( 0$52) would become subject to a 20% value-added rate and additional levies. Lawmakers declined to approve the change on schedule, in part because the tax increase was expected to be unpopular with the public.
As a result of the talks, the IMF agreed to allow Ukraine to postpone enactment of the parcel tax law until July, giving parliament more time to meet the commitment. The Fund's next review of Ukraine under the program is scheduled for September.
Markets reacted to the reported détente. Ukraine's dollar-denominated bonds maturing in 2034 climbed on the news, approaching 70 cents on the dollar after having traded as low as 52 cents in March.
Observers cited concerns among many Ukrainians and members of parliament about the parcel levy because consumers frequently buy goods from abroad. The country is also contending with the fiscal consequences of an ongoing war, which has pushed Ukraine's budget deficit into double digits. That shortfall has forced the government to seek additional revenue sources while relying heavily on aid from foreign partners, including the IMF, to finance the gap.
Context and next steps
The staff-level agreement represents a temporary solution that preserves short-term funding while postponing a politically sensitive reform. Final disbursement remains contingent on IMF board approval, and lawmakers will have until July to enact the parcel taxation change. The subsequent IMF review in September will assess further compliance with program commitments.