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IMF board to meet on Ukraine's loan program in late August

Thursday, 24 July 2014 - 8:56pm IST | Agency: Reuters

The board of the International Monetary Fund is expected to meet about Ukraine's loan program in late August, an IMF spokesman said on Thursday, which would likely allow the embattled country to receive its next aid disbursement of an expected $1.4 billion.

An IMF mission concluded its visit to Kiev last week to assess the country's progress with the conditions of the Fund's $17-billion bailout. IMF staff will then prepare a report for the Fund's board, which is likely to sign off on the review after its August recess, since Ukraine has met most of the program's conditions so far.

Ukraine, which is fighting a pro-Russian separatist rebellion in the east, received $3.2 billion in May as the first tranche of the two-year IMF aid package intended to shore up depleted foreign currency reserves and support the state budget.

IMF deputy spokesman William Murray declined to comment on whether Ukraine's program may have to be redesigned or bolstered with more funds due to the country's ongoing conflict. He also said the conflict could have an impact on the economy of the wider region, but the IMF did not have specific figures.

In an update to its World Economic Outlook, also released on Thursday, the IMF said the conflicts in Ukraine and Iraq risked denting global growth.

Part of the economic impact from the conflict has stemmed from sanctions that the United States and the European Union have imposed on Russia in response to what they view as its interventions in eastern Ukraine. In the latest volley, the United States last week slapped sanctions on two large Russian energy firms and two banks, in addition to some defense firms.

"Obviously recent sanctions ... signal an escalation of geopolitical tensions and could have a substantial adverse impact on the Russian economy," Murray said. "In addition to the direct impact of the exit of risk-adverse investors... there may also be larger indirect impact as well, from deteriorating confidence."




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