LONDON, Feb 13 – Ukraine anticipates that its new $8.2 billion agreement with the International Monetary Fund will receive official approval within the coming weeks, according to the country’s top debt official. This development marks a significant milestone as Ukraine enters the fifth year of its conflict with Russia.

This new IMF arrangement, set to follow the current $15.6 billion programme, aims to support Ukraine’s financial stability and government expenditures, amid expectations of a fiscal gap nearing $140 billion over the next several years.

Speaking to Reuters, Yuriy Butsa, Ukraine’s long-serving head of public debt management, expressed confidence that the IMF Board would shortly ratify the deal.

"I think it will happen in a matter of weeks," Butsa said while in London for official meetings. "It’s still realistic to expect it this February."

February 24 marks four years since Russia's invasion began. Since then, Ukraine has received substantial aid from Western allies and financial entities, in addition to undergoing a major sovereign debt overhaul totaling over $20 billion.

"We're currently awaiting the formal adoption of the IMF programme, but we've already reached consensus on the fiscal figures for this year and next," Butsa noted, also endorsing the EU’s newly approved 90-billion-euro loan package.

He remained cautious regarding discussions of a potential U.S.-facilitated truce being reached around the conflict's anniversary later this month.

President Volodymyr Zelenskiy has called for greater U.S. pressure on Russia to help end the war by summer, noting uncertainty around Moscow’s participation in upcoming negotiations initiated by the U.S.

"We must remain prudent in planning and not overreact to news cycles," Butsa explained, emphasizing that even a temporary halt in combat would not eliminate the country’s financial burdens.

"Even under a ceasefire, we believe it’s necessary to sustain a robust military presence and continue strengthening our defense resources," he added.

Butsa also indicated that Ukraine is not likely to quickly start issuing new international bonds once the war ends. The country intends to rely on concessional financing and domestic bond markets, which carry no foreign exchange risks.

Referring to IMF requirements under the debt sustainability framework, Butsa noted that the government would be limited in its ability to provide guarantees for public enterprises like Ukrainian Railways and Naftogaz in any future debt restructurings.

"There are strict limitations on sovereign guarantees due to our debt analysis," he said. "So we can’t issue them, but we can help these companies develop sustainable, long-term strategies."

Removing wartime capital controls will also be a key issue this year. A significant upcoming step is to permit international investors to withdraw the original amounts invested in local currency bonds issued by Ukraine.

This, Butsa said, is "a crucial element" in expanding future sales of local bonds and is a change that could be implemented even before hostilities fully end.

Ukraine is partnering with Clearstream, a European clearinghouse owned by Deutsche Boerse, to boost the appeal of its domestic bond market. It is also aiming to become part of the European Central Bank’s TARGET2 system, which handles a vast volume of euro-denominated transactions daily.

"We don’t have outdated systems to maintain, so we’re able to immediately implement the most effective solutions," Butsa stated, noting the government's intention to identify a strategic partner this year to support its financial infrastructure goals.

Another target is to rejoin major emerging market bond indices, such as JPMorgan’s GBI-EM benchmark, which draws significant investor flows. Ukraine had one bond included in the index prior to its maturity in March 2022.

"That's definitely one of our goals — we plan to return," Butsa confirmed. "We hope to make our bonds eligible for indexing and position our local market as a strong and dependable funding source."