The International Monetary Fund has approved a massive USD 17.5 billion in loans to Ukraine to pull the country back from the verge of economic collapse amid a standoff with pro-Russia separatists.
“The IMF Executive Board today approved an Extended Arrangement under the Extended Fund Facility (EFF) of SDR 12.348 billion (about USD 17.5 billion) for Ukraine, based on a comprehensive economic reform program supported by the Fund as well as by additional resources from the international community,” IMF Managing Director Christine Lagarde said.
In a statement, she said the new four-year extended arrangement will support economic stabilisation and wide-ranging reforms in Ukraine.
Lagarde said the Ukrainian authorities continue to demonstrate a strong commitment to reform.
“They have maintained fiscal discipline in very difficult conditions; allowed the exchange rate to adjust; and have increased retail end-user prices for gas. Many key measures are front-loaded under the new program including further sizable energy tariff increases; bank restructuring; governance reforms of state-owned enterprises; and legal changes aimed at combating corruption and strengthening the rule of law,” she said.
The Obama Administration welcomed the IMF decision.
“The US commends Ukraine for its bold reform programme,
which today earned the support of the IMF’s Executive Board and the accompanying USD 5 billion disbursement. Bolstered by additional financial support from the US, the European Union, and other partners, this programme will support Ukraine’s efforts to restore economic stability and growth,” US Treasury Secretary Jacob Lew said.
“Today’s decision also underscores the IMF’s central role as a first responder to global economic challenges and in promoting economic growth, consistent with US economic and national security interests,” he said.
White House Press Secretary Josh Earnest said the US welcomes IMF’s decision to provide loans to Ukraine.