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PM predicts IMF team visit for September
Journal Staff Report

KIEV, June 21 – The International Monetary Fund will probably send a team to Ukraine in September to see whether the country can qualify for the next installment within a $15 billion loan program, Prime Minister Mykola Azarov said Monday.

This timeframe is in contrast with an earlier estimate by Deputy Prime Minister Serhiy Tyhypko, who has predicted the team may arrive in July and the next installment - worth up to $3 billion - may be released in early August if Ukraine approves the pension reform legislation by July 8.

"I think that the team will arrive in September, and we will discuss all the issues," Azarov told reporters.

The comment is the latest in a widening split between government officials on whether Ukraine needs an assistance from the IMF, and how fast.

Tyhypko, as well as Serhiy Arbuzov, the governor of the National Bank of Ukraine, said that the country needs IMF lending yto resume immediately to prevent possibility of default and other problems, while Azarov had assured reporters that Ukraine will be able to maintain financial stability without resorting to the IMF funding.

Azarov made comment a dayafter Finance Minister Fedir Yaroshenko and Energy Minister Yuriy Boyko returned from Washington on June 19 after talks with IMF seeking resumption of borrowing.

"When I sent our members of the government to Washington, I set a condition that for us the main thing is stabilization of prices and preventing acceleration of inflation," Azarov said.

Ukraine moves a step closer towards the resumption of lending after Parliament, led by President Viktor Yanukovych's Regions Party, voted earlier this week to support pension reform gradually increasing the retirement age for women from 55 years to 60 years.

Tyhypko said that he will quick unless Ukraine approves the pension reform legislation before July 8.

The IMF suspended its $15 billion lending program for Ukraine since March delaying its installments after the government had refused to hike gas prices for households by 50% on April 1 and also postponed the pension reform that increases retirement age for women.

President Viktor Yanukovych has been quietly working with Regions Party and independent lawmakers to make sure the legislation is approved, opening way for the resumption of lending by the IMF, people familiar with the situation said.

The legislation, which gradually increases retirement age for women to 60 years from 55 years, has been scheduled to be debated and voted later this week.

Top government officials have been sharply split on whether Ukraine needs to immediately resume borrowing from the IMF.

Tyhypko believes that a quick resumption of the lending is important for the Ukrainian economy, and would allow corporations to borrow internationally at lower rates.

But Azarov said Ukraine can do without the IMF money, at least in the short term, and even asked the Washington-based lender to ease some of its demands.

Azarov asked the IMF recently to postpone indefinitely a measure hiking natural gas prices for households by 50%. The measure was due on April 1, but was later postponed.

Tyhypko said that Ukraine may qualify for $3 billion installment in August if the IMF decides to combine two tranches that had been so far postponed.

Ukraine needs to repay about $11 billion in debt this year, according to Azarov. (tl/ez)




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