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Ukraine, IMF agree terms to resume financial support - IMF

Ukrainian President Petro Poroshenko greets International Monetary Fund (IMF) Managing Director Christine Lagarde after a news conference in Kiev, Ukraine, September 6, 2015. REUTERS/Valentyn Ogirenko

KIEV (Reuters) - The International Monetary Fund has agreed with Ukraine the reform policies it must implement for the board to agree in July to dispense a long-delayed third tranche of loans under a $17.5 billion (£12 billion) bailout programme, the fund said on Wednesday.

An IMF mission visited Kiev last week to assess efforts to root out corruption and revamp Ukraine’s war-torn economy, which months of political turmoil and a reshuffle of the pro-Western leadership have disrupted.

Mission chief Ron van Rood said considerable progress had been made restoring stability, but said the government needed to boost efforts to improve transparency and the rule of law.

“Steadfast implementation of structural and institutional reforms is now critical,” he said in a statement.

“Unwavering determination in the fight against corruption (is) emerging as a litmus test for the government’s ability to retain broad domestic and international support for its policies,” he said.

Ukraine’s Western backers, including the United States, have expressed cautious support for the new government that was formed in April in the biggest reshuffle since 2014’s pro-European uprising.

A third tranche of IMF loans, worth $1.7 billion, has been delayed since last October due to the political infighting.

If the government takes concrete steps in key areas, including reform of inefficient state firms, the IMF board will consider disbursing the financial aid at an expected meeting in July, van Rood said.

Reporting by Alessandra Prentice; Editing by Hugh Lawson and Angus MacSwan