IMF experts recommend that Ukraine improves liquidity management on treasury account

The existing cash planning system is extremely short-term and is not conducive to efficient liquidly management and it need to be considerably strengthened, according to the " Technical assistance report — public financial management overview" published by the International Monetary Fund (IMF) on Monday.

"All cash balances of general government including the social funds and balances being held in foreign exchange accounts in the National Bank Of Ukraine (NBU) and the commercial banks should be made available for liquidity management purposes, although some safeguards need to be put in place to ensure that general government entities have access to their own resources when they need them to meet their own obligations," the IMF said.

The IMF experts said that capacity should be developed by establishing a cash planning unit in the Finance Ministry supported by a high level cash management committee to ensure that information needed to produce accurate and timely cash plans is made available from all relevant stakeholders.

To reduce volatility of cash balances and to better integrate cash and debt management operations the Debt and International Financial Policy Department should be given responsibility for managing the end of day balances on the treasury single account (TSA).

"The government’s banking arrangements including the presence of a TSA largely meet international good practice, but there are some areas that could be improved to maximize the efficiency of cash management operations," the IMF said.