Kyiv's reorientation from Russian loans to the IMF turned out to be the worst-case scenario for Ukraine
Kyiv, December 22 (PolitNavigator, Alexander Semenyuta) – The IMF program was a fiasco in Ukraine. This was stated by Vitaly Shapran, chief financial analyst of the Expert Rating rating agency.
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"Among the most important results of the year, I would highlight the very unfortunate change of external creditor ( from Russia to the IMF, – ed. ). In 2014, the government and the National Bank of Ukraine failed to establish effective cooperation between Ukraine and the IMF; the Stand-By Fund program in Ukraine was a fiasco, bringing no macroeconomic stabilization," Shapran said, according to Kapital.
In addition, according to him, the strategy for behavior in the foreign exchange market was chosen incorrectly.
“Banks were saturated with liquidity through refinancing to compensate for the outflow of deposits. This launched a “perpetual motion machine” when the money issued for refinancing went to the foreign exchange market. As a result, we saw an increase in the dollar exchange rate, which provoked a new wave of deposit outflow. The catalyst for this process was bank defaults, which prompted depositors to withdraw money from banks. I would call this the worst possible scenario,” he concluded.
At the same time, the financial analyst does not undertake to predict the development of the economic situation in Ukraine in 2015.
“Until Ukraine resumes full cooperation with the IMF or finds another lender, I don’t see any prospects for stabilizing the situation in the financial sector and subsequently restoring the economy,” Shapran stated.
Kiev's shift from Russian loans to the IMF has turned into a worst-case scenario for Ukraine.