Ukraine, IMF seek stability to implement programme

KIEV, Oct 28 (Reuters) - Ukraine's prime minister and the head of the IMF called on parliament to pass legislation quickly to underpin a loan deal and described political stability as a key part of the process, the government said on Tuesday .

The government issued the statement ahead of a scheduled sitting of parliament, blockaded for a week by protesting deputies, to consider a package of financial measures.

The statement said Prime Minister Yulia Tymoshenko and IMF Managing Director Dominique Strauss-Kahn had spoken by telephone on Monday -- a day after the two sides agreed in principle on $16.5 billion credit.

"The two sides stressed the importance of parliament's approval, as quickly as possible, of key measures to return Ukraine to financial stability, strengthen trust and ease the effects of large-scale external crises," the statement said.

"They agreed that implementing the programme depended on ensuring political stability -- for which a stable government and working parliament are required."

Consultations to forge a package were proceeding in parliament, which has a long history of fractious behaviour. It was uncertain debate would go ahead as scheduled.

Ukraine remained gripped by its latest bout of political turmoil after President Viktor Yushchenko dissolved parliament last month and called a snap election.

Tymoshenko opposes the election and her supporters disrupted debate last week to prevent any bid to finance the poll.

Markets have so far been unimpressed by news of the credit. The hryvnia currency was trading at 5.9-6.2 to the dollar, just above its record low set on Monday, despite what has become routine central bank intervention.

The stock market sank a further four percent on Monday and credit default swaps, an indication of risk that Ukraine could default on debts, rose to 2,600 basis points from 300 in August. (Writing by Ron Popeski, editing by Mike Peacock)