KIEV, June 24 An International Monetary Fund
mission was due in Kiev on Tuesday to check on Ukraine's
progress in implementing tough conditions for a $17 billion
bailout, the Fund said.
The ex-Soviet republic, facing an insurgency in its eastern
region, received a first tranche of about $3.2 billion in May
under the two-year programme to shore up depleted foreign
currency reserves and support the state budget.
Ukraine has already met some of the strict requirements for
the loan such as raising the price of gas in households and
industry and allowing the exchange rate of the national
currency, the hryvnia, to float.
It is also required, among other steps, to reduce the budget
deficit by about 2 percent of GDP each year from 2014-2016.
The IMF mission, scheduled to stay until July 3, will
conduct a first review of the economic programme as well as
Ukraine's future objectives, the IMF said in a statement.
The Kiev government's ability to meet the IMF targets may
have been complicated by the crisis in Ukraine's eastern
regions, where separatist rebellions erupted in April.
Donetsk and Luhansk regions, the crucible of the pro-Russia
rebel uprising, together account for nearly 18 percent of
Ukraine is at loggerheads with Russia, a major trading
partner, over the price of strategic supplies of Russian natural
gas, which are a huge drain on the budget.
Its accusations of Russian involvement in the separatist
insurgency have also helped drive ties to an all-time low.
Russia is a market for around a quarter of Ukrainian
exports. The IMF sees a deterioration of non-energy trade
relations as the primary risk to the successful implementation
of Kiev's economic programme, Russia's deputy Finance Minister
said in May.
(Reporting by Alessandra Prentice; Editing by Richard Balmforth
and Tom Heneghan)