Skip to main content

IMF resumes bailout for war-torn Ukraine after long delay, releases $1 billion

The country has suffered deep economic decline after two years of war, with GDP contracting 9.9 per cent in 2015. In photo: Ukrainian President Petro Poroshenko (L) with IMF chief Christine Lagarde (R) in Kiev in 2015. Photograph: (AFP)

AFP Washington, United States Sep 15, 2016, 02.47 AM (IST)

Ukrainian President Petro Poroshenko on Wednesday welcomed International Monetary Fund 's (IMF) decision to release additional aid worth $1 billion to the strife-torn country. The aid package had been held up in part on corruption concerns. 

Poroshenko said IMF's approval to release the funds showed that the world recognises that Ukraine was carrying out reforms.

The $17.5 billion program is intended to help stabilise the country after the 2014 ouster of pro-Russian President Viktor Yanukovych. Kiev had been waiting for the release of the lending since August last year. 

Stressing that a Russian attempt to undermine the IMF's decision had failed, Poroshenko said that the aid would also help keep the Ukrainian hryvnia currency stable and maintain macroeconomic stabilisation. 
 

IMF managing director Christine Lagarde said Ukraine had shown "welcome signs of recovery" despite long odds, with inflation receding and activity rising.



"...the Fund's resolution has sent a signal to the aggressor, who has tried to throw sand in our wheels even at the (IMF) board meeting. Russia's attempts to undermine the solidarity of the IMF with Ukraine, and to disrupt the decision on this tranche have failed. The Kremlin lost in this operation. Reforms make us stronger. At the same time, our ability to withstand external aggression has became stronger," Poroshenko was quoted as saying by Reuters. 

The country has suffered deep economic decline after two years of war, with GDP contracting 9.9 per cent in 2015. Wednesday's decision by the IMF Executive Board brings the total amount disbursed to about $7.62 billion, the Fund said in a statement, according to AFP. 

Despite Ukraine's failure to meet several program targets, including on limiting debt, boosting reserves and easing foreign exchange restrictions, the Fund's Executive Board said it approved the disbursement. 

IMF managing director Christine Lagarde said Ukraine had shown "welcome signs of recovery" despite long odds, with inflation receding and activity rising.

"While the social and economic cost of the crisis has been high, growth is expected to be higher in the period ahead," she said, however, Lagarde pointed out that the progress was far from recovery. 

The $1 billion approved on Wednesday was short of the $1.6 billion expected in the latest tranche of lending but the Fund did not explain the difference.

(WION with inputs from agencies) 

Show Comments
  • delete