Ukraine is getting an immediate US$10 billion lifeline from the International Monetary Fund (IMF) to shore up its struggling finances.
The money is part of a four-year US$17.5 billion bailout and is likely to be released in two quick tranches — the first by the end of this week and the other in the coming months, Reuters reported Thursday.
The remainder of the multinational aid package will come from other international organizations.
Also, Ukraine is expected to win US$15.4 billion in debt relief from bondholders.
The program “is very strongly front-loaded during the first year”, IMF managing director Christine Lagarde said in Berlin.
“Ukraine has satisfied all the prior actions that were expected and required of it in order to start running the program. We are off to a good start.”
She said the program aims to provide “immediate economic stabilization” to a country beset by conflict with Russia and uncertainty about its territorial integrity.
Prime Minister Arseny Yatseniuk said the IMF program’s impact should be felt quickly.
The program “will enable us to stabilize the economy and the financial sector. It will be used to stabilize the currency. It will enable the Ukrainian economy to grow from 2016,” Yatseniuk said in a televised statement.
After a year of political upheaval and war, Ukraine’s economy is in a tailspin with a currency that just pulled back from record lows, the highest interest rates in 15 years, and central bank reserves of just $6.4 billion, barely enough to cover five weeks of imports.
The IMF said the economy should grow 2 percent in 2016 after a contraction of about 5.5 percent this year and that by end-2015, Kiev should have enough reserves to cover about three months of imports.
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