IMF Ready to Act on Ukraine

The International Monetary Fund will answer Ukraine’s call for financial help “at this critical moment in its history,” fund chief Christine Lagarde said Thursday.

In the IMF’s first official statement on Ukraine since the country’s political crisis intensified last week, Lagarde said a fact-finding team will go to Kiev in the coming days to assess the financial needs.

“We are ready to respond,” she said.

The mission will help the IMF understand the economic situation and its officials will start discussing with Ukrainian authorities what reforms would be required in exchange for emergency loans, she added.

Ukraine’s finance ministry has said it needs $35 billion for this year and next to avoid default. The political turmoil since the end of last year has roiled the economy, depleted the central bank’s reserves and sent its currency tumbling.

Any financial help from the IMF for the country of 46 million is likely to come with tough conditions, including demands for budget cuts, structural reforms and a devaluation of the currency to make the economy more competitive. The IMF would also likely demand a sharp increase in the price of natural gas, which the country heavily subsidizes.

via Mainichi

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