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Thursday, March 12, 2015, 11:51

Ukraine: IMF okays US$17.5b credit program

By Associated Press

 Ukraine: IMF okays US$17.5b credit program
A Ukrainian serviceman takes up a position at the front line outside Kurahovo, in the Donetsk region of Ukraine, March 11, 2015. (AP Photo / Efrem Lukatsky)

KIEV, Ukraine - The International Monetary Fund agreed Wednesday to extend US$17.5 billion in loans to Ukraine as part of a program designed to pull the country back from the verge of economic collapse.

IMF managing director Christine Lagarde said in a statement that the new four-year extended arrangement will support economic stabilization and wide-ranging reforms in Ukraine.

Ukraine's Finance Minister Natalie Jaresko said earlier in the day that the government expected to receive US$5 billion from the IMF in the "coming days.''

Credit is being extended on condition that the government in Kiev implements deep structural reforms and slashes government spending.

On Tuesday, Ukrainian President Petro Poroshenko signed off on legislative measures to drastically reduce spending and also approved changes to the tax system.

"This fully carries out Ukraine's side of the agreements that were reflected in a memorandum with the IMF,'' Poroshenko said Wednesday at a joint press conference in Kiev with Swedish Prime Minister Stefan Lofven.

Lagarde hailed Ukraine's "strong commitment to reform.''

"They have maintained fiscal discipline in very difficult conditions, allowed the exchange rate to adjust, and have increased retail end-user prices for gas,'' she said in a statement.

Lagarde said measures would be taken to help cushion the poorest from the impact of adjustments.

Ukraine has been promised US$2 billion worth of credit from the United States and 1.8 billion euros (US$1.9 billion) in economic assistance from the European Union.

Sweden has committed to giving 175 million euros ($185 million) in interest-free loans over seven years, Poroshenko said at the press conference with Lofven.

Poroshenko said the overall assistance package being formed to see Ukraine through its economic crisis now exceeds US$40 billion.

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