IMF to approve new Ukraine bailout deal in coming weeks

GMT 20:46 2015 Thursday ,19 February

Arab Today, arab today IMF to approve new Ukraine bailout deal in coming weeks

The International Monetary Fund
Washington - AFP

The International Monetary Fund expects to approve a new $17.5 billion bailout of crisis-hit Ukraine in the coming weeks, while a global aid plan remains in flux, a spokesman said Thursday.
The IMF executive board will meet at the end of February or in early March to give the go-ahead on the proposed four-year loan program to Ukraine, said spokesman Gerry Rice.
The IMF unveiled a preliminary agreement with Ukrainian authorities on February 12 for an expanded bailout in exchange for economic reforms. It would replace an existing program, less than a year old, that has proved inadequate to stabilize Ukraine's finances as the country fights a pro-Russia insurgency in the industrialized east.
The IMF has indicated its $17.5 billion aid would be part of about $40 billion in assistance from the international community.
Financing would also come from Ukraine's creditors whose negotiations on restructuring the country's sovereign debt should begin soon, Rice said.
Rice acknowledged the broad aid program will not be determined before the IMF board votes on the Fund's aid, and noted the uncertainties of financing coming from debt restructuring.
"The Ukranian government discussions with their creditors will not be complete by then," he said.
"What we need by the time of the board meeting is... a meaningful sense that the financing package is coming together in the right direction," he added, expressing confidence that it would.
On Wednesday, the Institute of International Finance expressed concern that talks for the $40 billion bailout of Ukraine could hit private bondholders.
The IIF, which counts 500 major global financial institutions as its members, said the $40 billion rescue of the embattled country appears to include about $15 billion that would come from non-payment of Ukraine debt held by private sector investors, even before negotiations with private bondholders had begun.
Ondrej Schneider, an IIF expert recently returned from a mission to Kiev, said the private sector was not being consulted in the talks between the Ukraine government and major official creditors led by the IMF.
"The private sector is expected to contribute without any consultation. This is not a very friendly way to do these things," he said.


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