Ukraine to get $17bn in IMF loans

IMF Managing Director Christine Lagarde says executive board approves US$17.01 program for Ukraine

May 03, 2014 11:39 IST | India Infoline News Service
The International Monetary Fund on Wednesday approved a $17bn two-year loan programme for Ukraine.

The loan, under a two-year Stand-By Arrangement, backs a policy program that aims to restore macroeconomic stability, promote sustainable growth, and strengthen economic governance and transparency. The IMF approval makes $3.2 billion immediately available to Ukraine with the remainder subject to frequent reviews. The Stand-By Arrangement entails exceptional access to IMF resources, amounting to 800 percent of Ukraine's IMF quota.

IMF Managing Director Christine Lagarde said that the newly approved program with Ukraine aims to restore macroeconomic stability, strengthen economic governance and transparency, and launch sound and sustainable economic growth, while protecting the most vulnerable.

"Urgent action was necessary. Decisive measures were taken by Ukraine and decisive measures have been taken by the IMF. There has been a very strong endorsement for the program which will release over the course of the next two years $17.01 billion in different installments over the course of the next two years," Lagarde added.

"We believe that Ukraine has a possibility to seize the moment, to break away from previous practices, both from a fiscal, from a monetary and from a governance point of view,” she further said.

According to Lagarde, this program does have risks of two kinds: first of all, implementation, second, geopolitical. On the implementation front, we are taking all the precautions we can in order to mitigate those risks. On the geopolitical front, clearly the bilateral international support and the cooperation of all parties will be extremely helpful to reinforce the position of the economy of Ukraine, Lagarde said.

"Clearly on the front of sanctions, anything that undermines the economic situation of the country will jeopardize the implementation of the program which is why we very strongly encourage the parties to negotiate, to come to terms and whether it's a question of the future price of gas or the payment of arrears, for instance, we very much hope they will find an agreement shortly."

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