Ukraine’s relations with the International Monetary Fund (IMF) remain on track and will continue after the parliamentary elections, Ukrainian president Volodymyr Zelenskiy said on May 28. Investors were slightly spooked after Ukrainian oligarch and the president’s sponsor Ihor Kolomoisky suggested Ukraine should default on its IMF debt.

The IMF is ready to discuss further cooperation with Ukraine after the nation's snap parliamentary elections scheduled for July, head of the IMF's mission Ron van Roden told President Volodymyr Zelenskiy on May 28.

"We do not see obstacles to cooperation. After the parliamentary elections, after the government is formed, we are ready to come to Kyiv immediately and continue negotiations on the way to provide our support," Zelenskiy's media office quoted Ron van Roden as saying in Kyiv. The IMF did not immediately comment a meeting with Zelenskiy.

Kolomoisky made his comments in an interview with the Financial Times and Ukraine’s eurobonds sold off afterwards. Several senior Ukrainian politicians came out afterwards and said the speculation on a default was damaging to the country, but the comments from the IMF will reassure investors.

The IMF representatives have demonstrated "willingness" to continue the discussion on further cooperation with Ukraine once a new Ukrainian government is formed after the parliamentary elections. Before that, there will be ongoing consultations on the formation of a new reform agenda, the presidential media office said in a statement the same day.

In 2018, the Fund approved a 14-month $3.9bn Stand-By Arrangement (SBA) for Ukraine. The programme replaced a $17.5bn Extended Fund Facility (EFF) agreed with Kyiv in 2015. The National Bank of Ukraine (NBU) expects to obtain from the IMF two tranches of $1.3bn each by the end of 2019.

Meanwhile, Zelenskiy said that cooperation with the multinational lender "is being continued". The IMF has always been a reliable partner of Ukraine in times when we need support, and Ukraine, for its part, will also remain a partner in fulfilling its obligations," he added.

"Unfortunately, we are currently observing a delay in adopting the reformist draft laws long-awaited by the citizens, business and financial community. I am hopeful that the parliament of the new convocation will make up for this and provide a basis for receiving the next tranche from the Fund," Zelenskiy said.

He also underlined that several factors had influenced the decision to dissolve the nation' parliament, the Verkhovna Rada. "I believe this Verkhovna Rada has lost the ability to make responsible decisions," he said.

On May 21, Zelenskiy signed a special decree on the early termination of the powers of the nation's parliament, the Verkhovna Rada, and called early elections on July 21. 

Zelenskiy announced the dissolution of the Verkhovna Rada during his swearing in speech on May 20. At the same time, the new president urged lawmakers to adopt a number of urgent laws "within the next two months", specifically, on the abolition of parliamentary immunity, and on criminal liability for illegal enrichment. Now what constitutes a coalition is in dispute.

On May 22, the chairman of the nation's parliament's Andriy Parubiy said that following May 17's collapse of the ruling parliamentary coalition the Verkhovna Rada has 30 days for the creation of a new coalition.

Meanwhile, the secretary of the National Security and Defence Council of Ukraine (NSDC) Oleksandr Danylyuk said on May 28 that the new Ukrainian government will actively cooperate with the IMF and other international organisations regarding the preparation of a new support programme.

"We've agreed that we will now actively cooperate with the IMF and other international institutions in order during the summer period, during the elections, to prepare a new programme, which will give an additional impetus to the development of our country," Interfax quoted Danylyuk as saying.

The first steps the new government intends to take will be "decisions aimed at combatting corruption, re-launching the court reform, reformatting the law enforcement system - everything that the IMF almost had to force Ukraine to do, but [Ukraine] did not want to. Now one feels that the new government is really ready to make these changes that are vital for all Ukrainians."