The IMF is considering the possibility of reducing fees for debtor countries: What does this mean for Ukraine

The Board of Directors of the International Monetary Fund (IMF) is considering the issue of revising the size of the commission charged to the largest borrower countries, including Ukraine. This can significantly affect the financial situation in countries that have large loans from the IMF.

According to a Bloomberg report, additional fees are charged in order to limit the volume of loans and ensure timely repayment of loans under IMF programs. The Fund considers these fees to be a necessary part of its financial model, which allows it to curb excessive borrowing and long-term debt defaults.

Representatives of the borrowing countries, in particular Ukraine, claim that additional fees deplete their financial resources, which could be directed to food and health care. In today's environment, with high inflation and rising interest rates, such fees are becoming more and more punitive.

This is especially noticeable against the background of high global interest rates set by the US Federal Reserve System and the European Central Bank. Currently, the total interest rate on some loans from the IMF exceeds 8%, which is twice as much as compared to the pre-pandemic indicators.

The US, the IMF's largest shareholder, has already signaled its willingness to review the size of the fees. This can be a positive signal for other member countries of the fund, which are also interested in reducing the financial burden.

The final decision on the reduction of additional fees is expected by the end of this year. If this decision is adopted, it can significantly ease the financial pressure on debtor countries, in particular Ukraine, allowing them to direct more funds to domestic needs and development.