IMF agrees $14-18bn rescue loan for Ukraine
The International Monetary Fund (IMF) has announced it’s agreed a $14-18bn (£11.6-14.9bn) stand-by deal with Ukraine, which’ll unlock further aid of up to $27bn from the international community over the next two years.
"The mission has reached a staff-level agreement with the authorities of Ukraine on an economic reform programme that can be supported by a two-year Stand-By Arrangement (SBA) with the IMF," said the IMF in a statement.
The deal will be considered by the IMF’s executive board in April, following the adoption of a package of measures designed to stabilise the economy.
Ukraine's parliament, which has to approve the package, will vote on it later today.
The ousted government had said the country needed $35bn over two years to stave off bankruptcy.
Earlier today, prime minister Arseny Yatseniuk warned that Ukraine "is on the edge of economic and financial bankruptcy", saying the price of gas supplied by Russia will go up to $480 per 1,000 cubic metres on 1 April.
The IMF’s mission chief has declined to give a figure when it comes to how big the initial tranche of aid will be.
The fund’s required that measures are focused on:
(i) ensuring that banks are sound, liquid, and well-capitalized; (ii) upgrading the regulatory and supervisory framework of the NBU, including complying with international best practice and supervision on a consolidated basis, and (iii) facilitating resolution of non-performing loans in the banking sector.
Monetary policy, says the IMF, will target domestic price stability whiles maintaining a flexible exchange rate.
The fund says it’ll be working on developing the measures with the assistance of the World Bank, European Bank for Reconstruction and Development and other financial organisations to “help increase transparency of government operations, address long-standing government issues and remove barriers to growth.”
The IMF’s also preparing a comprehensive diagnostic study that look at areas ranging from corruption to the effectiveness of the judiciary.
There was no mention of debt restructuring in its statement, which’ll no doubt comfort bondholders.