Ukraine expects first tranche of $3 billion from IMF aid package

Photo: Ukraine expects first tranche of $3 billion from IMF aid package / Other News

The International Monetary Fund and Ukraine are discussing disbursement of $3 billion in the first tranche of a $14-18 billion bailout package, Ukraine's finance minister said on Friday.

The deal, announced on Thursday and which will also unlock further credits to a total of $27 billion, is intended to help the heavily-indebted ex-Soviet republic stabilize its economy after months of political turmoil, Reuters reported.

"They [the IMF] are ready today to talk about [disbursing] a first tranche of $3 billion, of which half will go to the National Bank and half to the state budget," the minister, Oleksander Shlapak, told journalists on the margins of a government meeting.

The Ukrainian parliament on Thursday night approved an anti-crisis law supporting the IMF program of reforms that accompanies the financial package, and which the Fund says is necessary to get the economy back on track and avoid a debt default.

The agreement is also subject to approval by IMF management and the executive board, which will consider it in April.

Conditions sought by the IMF include allowing the national currency, the hryvnia, to float more freely against the dollar, increasing the price of gas for domestic consumers, overhauling finances in the energy sector and following a more stringent fiscal policy.

The Kiev government has already taken a step towards the IMF by announcing it will raise gas prices for domestic users by more than 50 per cent from May 1.

A change of power took place in Ukraine on Feb.22.

The Verkhovna Rada (parliament) of Ukraine ousted President Viktor Yanukovych from the power, changed the constitution and scheduled presidential elections for May 25.

Yanukovych said he was forced to leave Ukraine under the threat of violence, and he remains the legally elected head of state.

A number of provinces in eastern and southern Ukraine, as well as the Crimea did not recognize the legitimacy of the Rada and decided on possibility of holding a referendum on the future fate of the regions.

The vast majority of residents of Crimea - 96 percent - voted to secede from Ukraine and join Russia, in a referendum held March 16.

Most countries refused to recognize the referendum's results.

On March 18 Russia and Crimea signed an agreement on Crimea as well as Sevastopol city joining the Russian Federation.

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Tags: IMF, Ukraine