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WASHINGTON. – The International Monetary Fund (IMF) said on Wednesday that its board has approved a two-year financial aid program totalling $17 billion for Ukraine to support its economy.
The IMF program, which is aimed at helping the country to restore macro-economic stability and sustainable growth, is expected to unlock additional international assistance of about $15 billion over the same two-year period.
The decision of the IMF executive board enabled the first tranche of loan of about $3,19 dollars to Ukraine’s government.
And about $2 billion dollars of the disbursement was allocated to support the budget.
The IMF noted the second and third disbursements will be based on “bi-monthly reviews and performance criteria” and the remainder of the program will be subject to “standard quarterly reviews and performance criteria.”
“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,” Christine Lagarde, managing director of IMF said after the meeting.
IMF’s program focuses on maintaining a flexible exchange rate to restore competitiveness, stabilising the financial system, gradually reducing the unaffordable fiscal deficit, eliminating losses in the energy sector, while enhancing social safety nets and decisively breaking with problematic past governance practices.
“The authorities are committed to maintaining a flexible exchange rate regime and focusing monetary policy on domestic price stability.
“With Fund technical assistance, they plan to adopt inflation targeting by mid-2015,” Lagarde said. – Xinhua.
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