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28 Mar 2014
IMF approved financial aid to Ukraine worth $27 bn – Danske Bank
FXStreet (Edinburgh) - The IMF finally announced a $27 billion-financial aid package to Ukraine. In exchange of economic reforms, said Senior Analyst at Danske Bank Sverre Holbek.
Key Quotes
“According to an IMF statement, an agreement has been reached on an economic reform programme. In return, Ukraine gets access to a two-year agreement with IMF, unlocking financial support to the amount of USD27bn”.
“Besides seeking a flexible exchange rate, Ukraine will also need to reduce the energy-sector’s fiscal drag, which entails a hike in the price of domestic gas by 50% from May along with the phasing out of energy subsidies by 2016”.
“Similar conditions were rejected by the previous Yanukovich government, contributing to the failure of earlier IMF programmes. However, the new government passed a key piece of legislation late Thursday, suggesting that it is prepared to comply and pay the price of re-orientating the country towards the west”.
Key Quotes
“According to an IMF statement, an agreement has been reached on an economic reform programme. In return, Ukraine gets access to a two-year agreement with IMF, unlocking financial support to the amount of USD27bn”.
“Besides seeking a flexible exchange rate, Ukraine will also need to reduce the energy-sector’s fiscal drag, which entails a hike in the price of domestic gas by 50% from May along with the phasing out of energy subsidies by 2016”.
“Similar conditions were rejected by the previous Yanukovich government, contributing to the failure of earlier IMF programmes. However, the new government passed a key piece of legislation late Thursday, suggesting that it is prepared to comply and pay the price of re-orientating the country towards the west”.