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IMF approves USD 17bln bailout for Ukraine

May 2, 2014

WASHINGTON, May 1 (KUNA) -- The International Monetary Fund (IMF) has announced the approval of a USD 17 million aid package for Ukraine in hopes of helping the country recovery its continuing crisis.

In a statement, the IMF said late Wednesday that the authorities' economic program supported by the Fund aims to restore macroeconomic stability, strengthen economic governance and transparency, and launch sound and sustainable economic growth, while protecting the most vulnerable.

This approval allows immediate disbursement of about USD 3.19 billion. The second and third disbursements will be, "based on bi-monthly reviews and performance criteria." The IMF Managing Director and Chair Christine Lagarde said, "deep-seated vulnerabilities, together with political shocks, have led to a major crisis in Ukraine. The economy is in recession, fiscal balances have deteriorated, and the financial sector is under significant stress." According to Lagarde, this aid package is expected to maintain an exchange rate to restore competition, stabilize the Ukrainian financial system, reduce the fiscal deficit, eliminate loss in the energy sector and help the country move away from its past problematic governmental practices.

Lagarde added, "the authorities are determined to stabilize the financial system, maintain confidence in banks, and strengthen balance sheets and financial regulation and supervision." She affirmed, "a strong and comprehensive structural reform package is critical to reduce corruption, improve the business climate, and achieve high and sustainable growth. The authorities have already enacted a new public procurement law, reducing room for misuse of public resources." The IMF noted that there are risks to the program in the case of further escalations from Russia the "unrest in the east of the country" that "pose a substantial risk to the economic outlook." (end)

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Source: Kuwait News Agency

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