imf approves loan to ukraine despite debt concerns
Last Updated : GMT 22:15:44
Arab Today, arab today
Arab Today, arab today

IMF approves loan to Ukraine despite debt concerns

Arab Today, arab today

Arab Today, arab today IMF approves loan to Ukraine despite debt concerns

The International Monetary Fund
Washington - AFP

The International Monetary Fund approved Friday the next installment of its massive loan to Ukraine despite uncertainty about the sustainability of the country's debt and its conflict with separatist forces.

The IMF executive board, which represents 188 member nations, gave a green light to the immediate disbursement of $1.7 billion, part of a support program awarded in March that has caused internal strains in the Washington-based institution.

In total, the IMF has pledged $17.5 billion in financial assistance over four years in exchange for drastic measures by the government to restore public finances, hammered by recession and the loss of part of its territory to pro-Russian separatists.

The new installment, after an initial $5 billion disbursement released in March, comes after the IMF completed its first review of the government's progress under the loan package, which aims to "put the economy on the path to recovery" and "strengthen public finances", the IMF said in a statement.

David Lipton, the IMF's first deputy managing director, said that the Ukrainian authorities had made a "strong start" in implementing their economic program.

"The momentum needs to be sustained, as significant structural and institutional reforms are still needed to address economic imbalances that held Ukraine back in the past," Lipton said in a separate statement.

Ukraine welcomed the new loan installment, saying it will be used to replenish the National Bank's reserves. "The new tranche will encourage growth in the economy and reassure financial markets both domestically and internationally," the Ukrainian finance ministry said in a statement.

But the task is Herculean. Deprived of the heart of its industrial sector in the eastern part of the country, lost to separatists, the Ukrainian economy is expected to plunge deeper into recession this year -- a 9.5 percent contraction the government estimates.

As gross domestic product shrinks, the country's debt appears on course to reach nearly 135 percent of GDP this year, compared with about 70 percent in 2014.

Under its policy, the IMF can only provide financing if a country's debt is "sustainable with high probability."

- Difficult debt talks -

To resolve this headache and satisfy the United States, its largest shareholder, the IMF said that Ukraine needed to find $15.3 billion in debt relief with private creditors over the coming four years.

But the difficult debt negotiations, under way for the past several weeks, have so far produced no concrete results and increase the risk of a Ukrainian default that could further drive away investors.

The creditors, led by US investment firm Franklin Templeton, have proposed a debt reduction of 10 percent, according to a source familiar with the discussions, far below the 40 percent "haircut" sought by Kiev.

Lipton reiterated that the Fund was prepared to continue its program even if debt negotiations with private creditors founder.

"In the event that talks with private creditors stall, and Ukraine determines that it cannot service this debt, the Fund could continue to lend to Ukraine consistent with its Lending-into-Arrears Policy," he said.

US Treasury Secretary Jacob Lew said the US "strongly supported" the IMF's latest disbursement to Ukraine.

"We urge the creditors participating in the ongoing debt operation to reach a timely agreement with the Ukrainian authorities that fully satisfies the criteria outlined in Ukraine's IMF program -- including the debt sustainability target," Lew said.

The IMF points to Kiev's "commitment" in implementing reforms, in contrast with the lack of cooperation from the Greek authorities, for the apparent difference in its approach to the two heavily indebted countries.

Since the ouster of Ukraine's pro-Russian president Viktor Yanukovych in early 2014, the IMF can rely on a pro-West government which has been more willing to tackle tough programs, including an increase in gas prices.

The IMF notably has been able to count on the Ukrainian finance minister, Natalie Jaresko, an American who worked at the US State Department and became a Ukrainian citizen just before taking her post.

"Ukraine has been an incredibly encouraging situation," Christine Lagarde, the IMF managing director, said this week.

"We have seen political determination to change the face of Ukraine."

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

imf approves loan to ukraine despite debt concerns imf approves loan to ukraine despite debt concerns

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

imf approves loan to ukraine despite debt concerns imf approves loan to ukraine despite debt concerns

 



Arab Today, arab today
Arab Today, arab today Jordanian woman reveals her project

GMT 00:46 2017 Saturday ,11 November

Jordanian woman reveals her project
Arab Today, arab today PNG police start removing refugees

GMT 03:00 2017 Friday ,24 November

PNG police start removing refugees
Arab Today, arab today Sophian Yussef reveals suitable decoration

GMT 02:56 2017 Thursday ,23 November

Sophian Yussef reveals suitable decoration
Arab Today, arab today Syria congress to go ahead

GMT 02:24 2017 Friday ,24 November

Syria congress to go ahead
Arab Today, arab today IS media offline for a day

GMT 02:10 2017 Friday ,24 November

IS media offline for a day
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Human form of 'mad cow' disease

GMT 00:11 2017 Friday ,24 November

Human form of 'mad cow' disease
Arab Today, arab today British woman jailed in Iran to appear

GMT 03:19 2017 Friday ,24 November

British woman jailed in Iran to appear
Arab Today, arab today 'Trash islands' off Central America indicate

GMT 20:19 2017 Friday ,24 November

'Trash islands' off Central America indicate
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today Mitsubishi Materials units falsified product

GMT 03:24 2017 Friday ,24 November

Mitsubishi Materials units falsified product
Arab Today, arab today 'Robo-taxis' hold promise, and perils

GMT 08:07 2017 Thursday ,23 November

'Robo-taxis' hold promise, and perils
Arab Today, arab today Solaf happy for participating in “Hotline”

GMT 07:56 2017 Wednesday ,22 November

Solaf happy for participating in “Hotline”
Arab Today, arab today Delhi half-marathon to go ahead

GMT 03:51 2017 Saturday ,18 November

Delhi half-marathon to go ahead

GMT 08:03 2017 Tuesday ,21 November

Abeer Sabry reveals reason of “The Flood” success

GMT 08:03 2017 Thursday ,23 November

Srebrenica women cry tears of joy

GMT 18:41 2017 Friday ,20 October

Designer Aql Faqih aspires to innovation

GMT 16:04 2017 Friday ,17 November

paObama climate envoy slams Trump's rejection

GMT 17:52 2017 Sunday ,03 September

Etiquette expert underlines importance of gifts

GMT 09:12 2017 Thursday ,23 November

4 in 10 cancers due to modifiable risk

GMT 10:47 2017 Wednesday ,22 November

The Big Apple bike boom

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 16:53 2017 Tuesday ,05 September

Youssra depended on colored foam
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday