Date
22 November 2017
The IMF is assuming Ukraine will be able to keep its sovereign debt within the IMF limits in order to qualify for an international rescue. Photo: USA News
The IMF is assuming Ukraine will be able to keep its sovereign debt within the IMF limits in order to qualify for an international rescue. Photo: USA News

Ukraine needs US$15 bln from creditors to get IMF aid

Ukraine will be able to get US$15 billion in loans from creditors which will make it eligible for a bailout from the International Monetary Fund (IMF).

The amount will keep its ballooning sovereign debt within 70 percent of gross domestic product by 2020, a level the IMF thinks is sustainable, Reuters reported Tuesday, citing unnamed sources.

The IMF cannot lend to countries unless it believes they will be able to pay back the money eventually.

However, talks with creditors have yet to begin, raising some concern over a US$40 billion international rescue package announced last month, the report said.

After a year of political upheaval and war, Ukraine’s economy is in tailspin with a currency that just pulled back from record lows and the highest interest rates in 15 years.

Under the IMF program, Kiev must make deep changes to its energy sector and banking system and tackle decades of corruption even as it battles pro-Russia separatists in its eastern regions.

Last month, the IMF declined to share details of the financing package, and said it had not made any assumptions about a debt restructuring for private creditors.

The Washington-based fund announced a preliminary agreement for a new US$17.5 billion, four-year loan program for Ukraine last month, alongside pledges from the World Bank, the United States, the European Union and other countries.

The IMF’s board is widely expected to approve that program when it meets on Wednesday after Kiev passed a new draft budget last week to help it clinch the deal.

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RC/RA

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