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                        THURSDAY, MARCH 28, 2024
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Ukraine's dialogue with IMF to continue
Journal Staff Report

KIEV, April 10 – The International Monetary Fund will need additional consultation with Ukraine in the coming weeks to decide whether to provide a $15 billion standby loan to the country.

An IMF team completed its two-week mission in Ukraine, noting “productive discussions,” but said more time was needed to assess the situation.

Ukraine, which needs the loan to support its foreign currency reserves and to refinance about $9 billion in foreign debt falling due this year, including $5.8 billion owed to the IMF, started the talks in January.

"The key building blocks of a new program would be measures to reduce Ukraine's fiscal and external current account deficits, and energy sector and banking reforms, in order to create the conditions for sustained economic growth and job creation in Ukraine," Chris Jarvis, the head of the IMF team, said in a statement.

"The mission made good progress in discussing these issues, and our dialogue will continue in the coming weeks," he said.

The IMF suspended its previous $15.5 billion loan to Ukraine in early 2011 after the government had failed to hike by 30% natural gas prices for households. The IMF wants the gas prices to increase to stop losses faced by Naftogaz Ukrayiny, the national energy company.

The natural gas price remains one of the main stumbling blocks in the way of a new loan deal as President Viktor Yanukovych's government continues to resist calls for unpopular austerity measures.

But favorable conditions on the global capital markets - propped up by liquidity injections from major central banks - are strengthening Ukraine's hand, allowing it to issue Eurobonds at relatively low rates.

This week, Ukraine sold a $1.25 billion, 10-year bond with a yield of 7.5 percent. In January, it placed a $1 billion bond with the same maturity at 7.625%, Reuters reported. (tl/ez)




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