The International Monetary Fund, said on Thursday, agreed to bail-out Ukraine in the amount of $14-18 billion, which will unlock further credits to reach a total of $27 billion over the next two years.
The agreement is to help Ukraine meet debt payments of the aftermath of anti-government posts that resulted to oust President Victor Yanukovich and a standoff with Moscow in which Russia annexed the Crimea region.
“The mission has reached a staff-level agreement with the authorities of Ukraine on an economic reform program that can be supported by a two-year Stand-By Arrangement (SBA) with the IMF,” as the IMF stated.
“The financial support from the broader international community that the program will unlock the amount to $27 billion over the next two years. Of this, assistance from the IMF will range between $14-18 billion, with the precise amount to be determined once all bilateral and multilateral support is accounted for.”
The agreement is subject to approval by IMF Management and Executive Board, which will consider it in April.
“Following the intense economic and political turbulence of recent months. Ukraine has achieved some stability, but faces difficult challenges,” the IMF statement said.
Announcing the agreement in the Ukrainian capital, Kiev, IMF mission Chief Nikolay Gueorguiev negated to say how big the initial tranche of aid would be.
Kiev has said it desperately needs cash to cover expenses and avert a possible debt default. The country’s finance minister has predicted the economy will contract 3 percent this year, weakened by years of mismanagement and political turmoil.
The support of IMF to bailout will help Ukraine’s economy and clear the way for several billion dollars in aid from the United States, European Union, Japan and other nations.
New leaders of Ukraine, announced Wednesday, a radical 50 percent increase in the price of domestic gas from May1, meeting an unpopular condition for IMF aid that Yanukovich had refused before he was ousted last month.