Ukrainian President Petro Poroshenko on Thursday welcomed a decision by the International Monetary Fund to release additional aid worth $1 billion to Kiev, saying it showed that the world recognizes that Ukraine was carrying out reforms.
The fund’s decision paved the way for a $1 billion loan guarantee from the United States and a 600 million euro loan from the European Union, Poroshenko said.
To date, Ukraine has received about $7.62 billion in the program launched in March 2015.
The latest disbursement was less than the roughly $1.7 billion anticipated, after some reforms required by the fund had stalled.
But the IMF said in a statement that the board had approved waivers for Kiev’s failure to meet criteria related to international reserves targets, external payments arrears and foreign exchange restrictions.
Ukrainian President Petro Poroshenko said the disbursement would clear the way for an additional $1 billion U.S. loan guarantee and a new 600 million-euro loan from the European Union.
In a statement, he said a Russian attempt to undermine the IMF’s decision had failed, and that the funds’ release would help keep the hryvnia currency stable and aid the economy.
“The positive decision by the IMF is evidence that the world recognizes that reforms are happening in Ukraine, that real and positive changes are happening in Ukraine, and that the country is moving in the right direction,” Poroshenko said.
Last week, Ukrainian Finance Minister Oleksandr Danylyuk said the IMF decision should clear the way for the sale of about $1 billion in U.S.-guaranteed bonds by the end of September.
The IMF cash and external loans should boost foreign currency reserves to $17.2 billion by the end of the year, a central bank deputy governor, Oleh Churiy, said, welcoming the IMF decision as a positive signal for domestic and foreign investors.
IMF Managing Director Christine Lagarde said in a statement after the board’s vote that Ukraine was showing signs of recovery and improved confidence, which she attributed to the implementation of reforms, sound macroeconomic policies and efforts to rehabilitate Ukraine’s banking system.
“Further progress in fiscal reforms is key to ensure medium-term sustainability,” Lagarde said, calling for pension reforms and tax policies that would avoid higher deficits, and the restructuring of state-owned enterprises. (with AP, Reuters)