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27 Mar 2014
Ukraine reaches agreement with IMF on loan size and conditions
FXStreet (Łódź) - After two weeks of negotiations with the authorities in Kiev the International Monetary Fund said on Thursday that it could offer Ukraine a loan of 14-18 billion dollars over the next two years. The deal also unlocks a 27 billion dollar international aid program for the country.
In return for the loan Ukraine has pledged to implement key structural reforms, which according to an IMF tweet “aim to put the country on the path of sound governance and economic growth while protecting the poor.”
Among the efforts which Ukraine has to make in exchange for the money are reforms of the energy and financial sectors, adjustment of monetary and exchange rate policies as well as fiscal policies. The authorities in Kiev also pledged to enhance governance and transparency. The World Bank and the European Bank for Reconstruction and Development will provide assistance with improving the business climate in the country while the IMF will help prepare the strategy for fighting corruption.
Following the announcement of the deal, Ukrainian Prime Minister Arseny Yatseniuk said that it was crucial for Ukraine to implement the austerity measures required by the IMF, as without them the country's GDP could drop by 10% this year and the economy could default.
The IMF-Ukraine agreement has been reached at staff-level and still needs to be approved by the fund's executive board. That is expected to happen in April, “following the authorities’ adoption of a strong and comprehensive package of prior actions aiming to stabilize the economy and create conditions for sustained growth,” according to IMF's press release.
In return for the loan Ukraine has pledged to implement key structural reforms, which according to an IMF tweet “aim to put the country on the path of sound governance and economic growth while protecting the poor.”
Among the efforts which Ukraine has to make in exchange for the money are reforms of the energy and financial sectors, adjustment of monetary and exchange rate policies as well as fiscal policies. The authorities in Kiev also pledged to enhance governance and transparency. The World Bank and the European Bank for Reconstruction and Development will provide assistance with improving the business climate in the country while the IMF will help prepare the strategy for fighting corruption.
Following the announcement of the deal, Ukrainian Prime Minister Arseny Yatseniuk said that it was crucial for Ukraine to implement the austerity measures required by the IMF, as without them the country's GDP could drop by 10% this year and the economy could default.
The IMF-Ukraine agreement has been reached at staff-level and still needs to be approved by the fund's executive board. That is expected to happen in April, “following the authorities’ adoption of a strong and comprehensive package of prior actions aiming to stabilize the economy and create conditions for sustained growth,” according to IMF's press release.
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