International Monetary Fund agrees US$17.1 billion bailout for Ukraine in an attempt to help the country's unstable economy.
WASHINGTON – The International Monetary Fund approved Wednesday a two-year loan for Ukraine as a means to stabilize the country's turbulent economy.
In a statement the fund said it had stepped in as Ukraine's "economy is in recession, its fiscal balances have deteriorated and the financial sector is under significant stress."
The two-year Stand-By Arrangement, an economic program involving financial aid to a member state in need of financial assistance, amounts to US$17.1 billion with the first installment of US$3.2 billion to be released immediately.
However, the loan is subject to strict reforms, including the reduction of corruption and “the second and third disbursements will be based on bi-monthly reviews and performance criteria, and the remainder of the program period will be subject to standard quarterly reviews and performance criteria,” according to the statement.
Christine Lagarde, the fund's managing director, said in a press briefing that there are risks to the fund's loan, but Ukraine had demonstrated that it was willing to undertake reforms.
"We believe that Ukraine has an opportunity to seize the moment, to break away from previous practices, both from the fiscal, from the monetary and from the governance point of view,” Lagarde said.
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