IMF approves $15-billion loan for Ukraine

"Ukraine is emerging from a difficult period during which the economy was severely hit by external shocks and exacerbated by domestic vulnerabilities. The authorities are committed to addressing existing imbalances and putting the economy on a path of durable growth, through important fiscal, energy, and financial sector reforms," John Lipksy, the fund`s first deputy managing director and acting chair, was quoted on the website as saying.

In November 2008, the IMF started a $16.4 billion standby loan arrangement for Ukraine, of which more than $11 billion was disbursed. Ukraine expected to receive the remaining $3.8 billion in November 2009, but the funds were frozen due to political instability in the country.

Since the new government came to power in Ukraine earlier this year following presidential elections won by Viktor Yanukovych, the situation in the country has normalized. Yanukovych has managed to convince the IMF that reforms being carried out by the new Ukrainian authorities will allow rapid economic growth in the country.

Earlier in July, the IMF agreed to allocate Ukraine a $14.9 billion loan under a new 2.5 year cooperation program. The figure announced on Wednesday appears to be even bigger.

The approved standby program allows Ukraine to receive the first $1.89-billion tranche immediately, the IMF said.

The loan has been approved in view of "robust structural reforms of the pension system, public administration, and the tax system" expected in Ukraine over the next two years, as well as the strengthening financial position of the gas sector and the government`s efforts to "enhance the National Bank of Ukraine`s independence and accountability"

"Sustained implementation of these reforms will help Ukraine entrench macroeconomic stability, boost confidence, facilitate access to capital markets, and emerge with more balanced and robust growth," the IMF said.

Yulia Tymoshenko, the country`s opposition leader and former prime minister, earlier criticized the IMF`s intention to allocate an almost $15-billion loan to Ukraine. She said that such a large loan would be a burden for the country, "inadmissible at the moment," and that Ukraine actually needs "from three to five billion, maximum."