IMF close to deal on Ukraine aid

Written By Unknown on Kamis, 27 Maret 2014 | 19.15

27 March 2014 Last updated at 10:31

The International Monetary Fund (IMF) is close to agreement with Ukraine on financial assistance worth $14-18bn (£8.5-£11bn) over the next two years.

An agreement still needs approval by the full board of the IMF

The stand-by arrangement comes at the end of a three-week visit by IMF officials to the country.

The deal is expected to unlock a further $27bn in loans for Ukraine from the European Union and the US.

"Following the intense economic and political turbulence of recent months, Ukraine has achieved some stability but faces difficult challenges", the IMF's Mission Chief for Ukraine said in a statement.

'Edge of bankruptcy'

The deal goes hand in hand with a reform programme for Ukraine's ailing economy.

A cut in energy subsidies to consumers has been one of the conditions of an international rescue deal and on Wednesday Ukraine's interim government agreed to raise domestic gas prices by 50% in its effort to secure the IMF aid package.

Ukraine's ousted President Viktor Yanukovich had refused to take this unpopular step.

But the country's new Prime Minister Arseny Yatsenyuk told parliament that Ukraine was "on the edge of economic and financial bankruptcy".

He said that without the austerity measures proposed by the IMF, the economy could contract by as much as 10% this year.


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