UPDATE 1-Ukraine expects first tranche of $3 billion from IMF aid package

Fri Mar 28, 2014 9:05am EDT

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KIEV, March 28 (Reuters) - The International Monetary Fund and Ukraine are discussing disbursement of $3 billion in the first tranche of a $14-18 billion bailout package, Ukraine's finance minister said on Friday.

The deal, announced on Thursday and which will also unlock further credits to a total of $27 billion, is intended to help the heavily-indebted ex-Soviet republic stabilise its economy after months of political turmoil.

"They (the IMF) are ready today to talk about (disbursing) a first tranche of $3 billion, of which half will go to the National Bank and half to the state budget," the minister, Oleksander Shlapak, told journalists on the margins of a government meeting.

The Ukrainian parliament on Thursday night approved an anti-crisis law supporting the IMF programme of reforms that accompanies the financial package, and which the Fund says is necessary to get the economy back on track and avoid a debt default.

The agreement is also subject to approval by IMF management and the executive board, which will consider it in April.

Conditions sought by the IMF include allowing the national currency, the hryvnia, to float more freely against the dollar, increasing the price of gas for domestic consumers, overhauling finances in the energy sector and following a more stringent fiscal policy.

The Kiev government has already taken a step towards the IMF by announcing it will raise gas prices for domestic users by more than 50 per cent from May 1. (Reporting by Pavel Polityuk; Writing By Richard Balmforth; Editing by Toby Chopra)

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