IMF approves $1,7 billion loan to Ukraine

WASHINGTON (CIHAN)- The International Monetary Fund (IMF) approved on Wednesday (30 Apr)a $17 billion loan to Ukraine, backed by a comprehensive program of economic reforms. The IMF Managing Director Christine Lagarde said that urgent action was necessary.

“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 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.

“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,” Lagarde said.

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.

The program also is expected to unlock additional and sizable international official assistance, and help restore confidence among private investors.

“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.

When asked about the tensions between Russia and Ukraine, Lagarde encouraged both sides to find agreement.

“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,” Lagarde said.

To assist the authorities, the IMF will prepare a comprehensive diagnostic study to assess the current governance arrangements and frameworks, identify areas for strengthening and reform, rank the relative importance of the areas emanating from the diagnostic findings, and propose specific remedial measures and time frames for their implementation, likely to be supported in the context of the program with the IMF.

SOURCE: CIHAN

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