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Ukraine says no 'critical' need for new IMF aid

AFP , Tuesday 9 Aug 2016
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Views: 1112

Ukraine's finance minister has said the conflict-hit nation had no "critical" need for IMF funding as the global lender continues delaying the payout of billions of dollars in aid.

Oleksandr Danylyuk said in an interview published Tuesday that the release of new loan tranches from the International Monetary Fund would send a positive signal to foreign investors about the safety of putting their money in Ukraine.

But Danylyuk added that the "issue now is not the money that we need from the IMF".

"Our reserves are stable," he told the Novoye Vremya daily in an interview published on its website.

"Right now, there is no critical need for their money, but it may arise in a couple of months."

The IMF refused to discuss the possibility of resuming Ukrainian payments at its board meeting at the end of July.

It approved a $17.5-billion (15.8-billion-euro) bailout in 2015 that was part of a $40-billion global package aimed at helping Ukraine's leaders along on their westward path.

But the cash-strapped ex-Soviet republic -- which pulled out of a steep two-year-recession in March -- has only received $6.7 billion of IMF money and seen no new disbursements since August 2015.

The payouts have been stalled over Kiev's resistance to some of the tough and unpopular belt-tightening measures prescribed by the IMF.

Many of the proposed reforms have failed to win the backing of populist and nationalist parties that rose to power in elections after Ukraine's February 2014 pro-EU revolution pulled it out of Russia's historic orbit.

But cementing ties with the European Union and the United States has proved to be a complicated task.

Russia annexed Ukraine's strategic Black Sea peninsula of Crimea in March 2014 -- a step that outraged Kiev's allies and sent Moscow's relations with the West plunging to a post Cold War-low.

The Kremlin denies plotting or backing a 27-month pro-Russian revolt in the industrial east of Ukraine that has claimed more than 9,500 lives and kept Kiev on constant edge.

But the economy has stabilised as the worst of the fighting has calmed.

Ukraine's central bank reserves have swelled to nearly $14 billion after slipping below $10 billion at the most painful juncture of its 2014-2015 economic malaise.

Kiev has also lowered its key interest rate to 15.5 percent from 20 percent at the start of the year after battling against an inflation rate that hit nearly 50 percent last year.

Ukraine now expects the rise in the cost of living to level out at around 12 percent in 2016.

Danylyuk refused to divulge what disputes were currently holding up the release of new IMF loans.

But the IMF has previously demanded more transparency from various state institutions and a more vigorous fight against corruption that has plagued a succession of governments.

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