IMF says Ukraine's loss of east would require new bailout

WASHINGTON Thu May 1, 2014 11:01am EDT

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WASHINGTON May 1 (Reuters) - Ukraine's loss of its territory in the east would force the International Monetary Fund to re-design its $17 billion bailout of the country, and would likely require additional financing, the Fund warned on Thursday.

The IMF also said a deterioration in relations between Ukraine and Russia, a key export market for Kiev, could further hurt Ukraine's economy and also force an adjustment to its bailout, approved by the IMF board on Wednesday.

"Should the central government lose effective control over the East, the program will need to be re-designed," the IMF said in a staff report on Ukraine's aid program that was released on Thursday. (Reporting by Anna Yukhananov; Editing by Andrea Ricci)

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