International Monetary Fund approves $17.5bn Ukraine loan
The International Monetary Fund (IMF) has signed off on a $17.5-billion loan program for Ukraine, as part of a package of assistance aimed at pulling the war-torn country back from the verge of default.
The new four-year IMF program “will provide more funding, more time, more flexibility, and better financing terms for Ukraine,” IMF Managing Director Christine Lagarde said in a statement released on Wednesday.
The financial aid is part of a possible $40-billion package, which includes contributions from the United States and European Union.
“The program is ambitious and involves risks, notably those stemming from the conflict in the east of the country,” she added.
Earlier, Ukraine's Finance Minister Natalie Jaresko (pictured below) said that Kiev expects to receive $5 billion of the loan in the "coming days."
The credit is being extended on the condition that Ukraine implements severe structural reforms and cuts government spending.
On Tuesday, Ukrainian President Petro Poroshenko officially approved the required legislative measures to reduce spending and alter the tax system.
"This fully carries out Ukraine's side of the agreements that were reflected in a memorandum with the IMF," Poroshenko said Wednesday at a joint press conference in Kiev with Swedish Prime Minister Stefan Lofven.
"They have maintained fiscal discipline in very difficult conditions, allowed the exchange rate to adjust, and have increased retail end-user prices for gas," the IMF chief said in the statement.
Ukraine's economy, already crippled by corruption, has been further burdened by clashes in its eastern region with pro-Russians.
The two mainly Russian-speaking regions of Donetsk and Luhansk in eastern Ukraine have been the scene of deadly clashes between pro-Russia forces and the Ukrainian army since Kiev launched military operations to silence protests there in mid-April 2014.
Violence intensified a month later after the two flashpoint regions held local referendums in which their residents voted overwhelmingly in favor of independence from Ukraine and joining the Russian Federation.
According to the United Nations, the armed conflict in eastern Ukraine has claimed the lives of more than 6,000 people, while around 1.5 million people have also been forced from their homes.
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