January 21, 2015 / 12:36 PM / 3 years ago

Ukrainian finance minister hopeful of IMF deal in "very near future"

DAVOS, Switzerland, Jan 21 (Reuters) - Ukrainian Finance Minister Natalia Yaresko said on Wednesday Kiev was hopeful that a deal with the International Monetary Fund to shore up Ukraine's finances would be reached in the very near future.

Ukraine's economy has been pushed close to bankruptcy by a war with pro-Russian separatists in the east, and economists have warned of debt writedowns if an existing IMF loan programme is not beefed up to plug a estimated $15 billion funding gap.

"The IMF team is in Kiev and I am hopeful we'll have a deal in the very near future. Once they leave, we would like to see an approved programme within a month or so," Yaresko told Reuters on the sidelines of the World Economic Forum.

When asked if $15 billion would be enough to pull Ukraine out of economic crisis, Yaresko emphasised the urgent need for an IMF decision.

"The main thing is that we need a decision. And front-loading is very important. Any number, if it is dribbled out over a long period of time, might not be sufficient."

The existing IMF package, agreed in April last year, is worth $17 billion and has so far paid out $4.6 billion in two tranches.

The collapse in Ukraine's hard currency reserves to just enough to cover five weeks of imports is threatening to force Ukraine into extending debt maturities or even writing down government debts, but Yaresko said: "It is our intention to meet our obligations."

The IMF, along with Ukraine's other Western backers including the European Union, has said that any extra financial help will hinge on Kiev's ability to implement long-promised reforms.

"We are grateful that Europe is standing side-by-side with us. Would we like more support? Yes," Yaresko said.

Ukraine's foreign currency reserves stand at $7.5 billion, while its debt obligations this year total around $10 billion, including corporate and sovereign loans and bonds. ($1 = 0.8641 euros) (Writing by Alessandra Prentice; Editing by Kevin Liffey)

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