KYIV, Nov 23 – The International Monetary Fund has approved release of $700 million installment to Ukraine to encourage the government speed up reforms amid reports that Russia has been building up troops on the border.

The IMF also agreed to extend its $5 billion stand-by program until next June, giving Ukraine a chance to qualify for the rest of the money once the government accelerates the reforms.

The IMF decision will provide support for President Volodymyr Zelenskiy as Ukraine is facing a set of serious economic problems in addition to a looming standoff with Russia in a military conflict that continues since 2014.

Russia may be preparing to assault on Ukraine with airstrikes, artillery and tanks in late January or early February, according to an assessment by the Ukrainian military intelligence. The U.S., which supports Ukraine in the conflict, over the past several weeks has warned its European allies about the potential attack.

Ukraine had secured a loan deal last year as the country tumbled into recession due to the coronavirus pandemic. But loan disbursal stalled over concerns about reforms and the independence of the central bank.

The Ukrainian government is grappling with surging coronavirus cases, higher inflation and growing jitters about Russian troop movements on its eastern borders.

"Grateful to @IMFNews Board of Governors for the decision to complete the review of the stand-by program on the allocation of a tranche of about $ 700 million," Zelenskiy wrote in a tweet. "We'll use these funds to support the financial system & combat #COVID19 consequences. The IMF program will be continued."

The IMF said in a statement that its board had agreed to a "rephasing" of loan disbursements without giving specifics.

The program commits Ukraine to keeping its debt sustainable, safeguarding the central bank's independence, bringing inflation back into its target range and tackling corruption, the IMF said.

"Ukraine's IMF supported economic program aims to help the authorities address the effects of the COVID-19 shock, sustain the economic recovery, and move ahead on important structural reforms to reduce key vulnerabilities," it said.

Finance Minister Serhiy Marchenko said the government will stick to the IMF program in order to qualify for more funding next year.

"We must ensure a budget deficit of no more than 3.5% of GDP next year and possibly other parameters that are less significant," Marchenko said.

"By pursuing a sensible, balanced and predictable policy, we will be able to convince our partners and get a few more tranches of this assistance,” he said. “It is very important, because in preparing the budget for 2022, we, in particular, provide IMF funds."

Ukrainian bond prices tumbled to their lowest in over a year on Monday as worries about an escalating conflict with Russia mounted.

Coronavirus cases and deaths hit records in the country in November, prompting the government to restrict access to shops, businesses and public transport. (tl/ez)