(Corrects GMT conversion in paragraph 2)
By Natalia Zinets
KIEV, March 26 The International Monetary Fund
concluded talks with Ukrainian officials on Wednesday, and was
likely to announce an aid deal on Thursday for Kiev to help plug
the government's budget gap and put its economy on a growth
"The talks have ended," a source close to the negotiations
said. The central bank late on Wednesday announced a press
conference with the IMF's mission chief for Thursday at 9:30
a.m. (0730 GMT).
A bailout from the IMF would help prop up Ukraine's economy
and clear the way for several billion dollars in aid from the
United States, European Union, Japan and other nations. Ukraine
has been in turmoil after months of anti-government protests and
Russia's annexation of its Crimea region.
In another sign officials were putting the finishing touches
on a deal, Ukraine's new leaders announced a radical 50 percent
increase in the price of domestic gas from May 1, meeting an
unpopular condition for IMF aid that Russian-backed President
Viktor Yanukovich had refused before he was ousted last month.
The IMF had long urged Kiev to cut energy subsidies, saying
they ate up 7.5 percent of Ukraine's GDP in 2012. The Fund has
also been pushing Ukraine to float its currency.
Ukraine's new leaders, who took power when Yanukovich was
ousted after months of street protests, have pledged to meet all
requirements set by the IMF.
Kiev has said it desperately needs cash to cover expenses
and avert a possible debt default. The country's finance
minister has predicted the economy would contract 3 percent this
year, weakened by years of mismanagement and the recent
Citing officials involved in the talks, the Financial Times
reported that the IMF was expected to announce a bailout package
of about $15 billion as early as Thursday. After that report,
Ukraine bond prices ticked higher and the cost to insure its
debt fell to the lowest level in a month.
The IMF had considered a quick infusion of $1 billion.
However, the paper said the Fund now hopes to agree to a larger
and more lasting package.
On Tuesday, Ukrainian Finance Minister Olexander Shlapak
said Kiev was negotiating for a deal of between $15 billion and
Once IMF staff reaches agreement on parameters of an aid
package, its board must still sign off on the program. Ukraine's
leaders have said they hope to receive the first tranche of IMF
aid in April.
After the FT report, Ukraine's five-year credit default
swaps fell further below the 1,000 level that indicates
Meanwhile, yields on several Ukraine bond issues dipped as
their prices, which move in the opposite direction, rose
(Reporting by Natalia Zinets in Kiev; Additional reporting by
Anna Yukhananov in Washington, Dan Burns in New York and Carolyn
Cohn in London; Editing by Paul Simao, James Dalgleish and David