The IMF’s board gave its nod to the $17.5 billion loan with $5 billion to be released before the weekend and $5 billion more within the next few months, officials of the institution declared.
Aside from this sum, the Ukrainian Government will also get another $7.5 billion in advances from other global organizations and a possible $15.4 billion (debt relief) that Ukraine hopes to bargain with bondholders.
IMF Managing Director Christine Lagarde announced from Berlin that Ukraine has satisfied all previous requirements to start the program.
This is considered an immediate program of economic stabilization for a nation embroiled in hostilities with Russia as well as insecurity regarding territorial integrity.
For Prime Minister Arseny Yatseniuk, the effect of the IMF aid will be felt at once in a country that has to cope with issues in balance of payments problems and a collapsing currency.
Due to geopolitical turmoil, the economy of Ukraine is floundering with a currency barely recovering from exceptional lows, exorbitant interest rates in the last decade and a half, as well as central bank reserves of only $6.4 billion. This amount is not even sufficient to cover up five weeks of the nation’s imports.
The IMF projects Ukraine’s economy to rise by at least two percent in 2016 after shrinking approximately 5.5 percent within the rest of 2015. During that time, Kiev should have an adequate amount reserves to account for one quarter of imports. Ukraine's parliament endorsed a draft of IMF-supported amendments to its budget which formed part of major preconditions for approval of its rescue.
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