UPDATE 2-IMF talks in danger unless Ukraine parlt acts:speaker

Fri Oct 24, 2008 9:36am EDT
 
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(Adds central bank quotes, details)

By Yuri Kulikov

KIEV, Oct 24 (Reuters) - Ukraine's talks to secure credit from the International Monetary Fund could collapse unless parliament acts to pass measures to ease the effects of the global financial crisis, the chamber's chairman said on Friday.

A package proposed by the government calls for amendments to the 2008 budget, borrowing of $2 billion from unnamed international financial institutions, sovereign guarantees to firms seeking foreign credit and creating a stabilisation fund.

"It is very important for us to achieve results in a vote on the financial crisis," Arseniy Yatsenyuk told the chamber, which was deadlocked for the fourth day.

"Failure to get a result will have as a consequence the collapse of talks with international financial organisations."

An International Monetary Fund mission has been holding talks for more than a week in Kiev on extending credit that Ukrainian officials say could amount to up to $14 billion.

The Fund has offered no comment on the talks, but says the mission will to remain in Kiev "as long as is required".

Yatsenyuk said no consensus could be reached on six draft laws to tackle the crisis, including the package proposed by Prime Minister Yulia Tymoshenko's government.

A working group was set up to draft a document able to command a majority. Debate would resume next Tuesday.

Tymoshenko, speaking later outside the chamber, said: "Getting assistance from international financial organisations in the next few days depends directly on passing this package of anti-crisis laws."

Credits, she said, "will not put Ukraine in difficulty. On the contrary, they allow us to invigorate the banking system."

GOVERNMENT PACKAGE

The crisis has put pressure on the hryvnia currency, which has lost 20 percent of its value in a week and was trading at record lows to the U.S. dollar. It has also placed in doubt the stability of banks to refinance debt.

The deputy head of the central bank, Anatoly Shapovalov, said the hryvnia had lost ground due to "panic" and saw no need for a devaluation. The bank, he said, could force exporters to sell dollars on the interbank market but only as a last resort.

Pressure grew to break deadlock over the package after a new downgrade of Ukraine's sovereign rating by agency Standard and Poor's.  Continued...