KIEV (Reuters) - The International Monetary Fund said on Thursday it had agreed a $14-18 billion bailout for Ukraine, a deal that will unlock further credits to reach a total of $27 billion over the next two years.
The agreement is intended to help Ukraine meet debt payments looming this year after months of anti-government protests which resulted in the overthrow of President Viktor Yanukovich and a standoff with Moscow in which Russia annexed the Crimea region.
“The mission has reached a staff-level agreement with the authorities of Ukraine on an economic reform program that can be supported by a two-year Stand-By Arrangement (SBA) with the IMF,” the IMF said in a statement.
“The financial support from the broader international community that the program will unlock amounts to $27 billion over the next two years. Of this, assistance from the IMF will range between $14-18 billion, with the precise amount to be determined once all bilateral and multilateral support is accounted for.”
The agreement is subject to approval by IMF Management and the Executive Board, which will consider it in April.
“Following the intense economic and political turbulence of recent months, Ukraine has achieved some stability, but faces difficult challenges,” the IMF statement said.
Announcing the agreement in the Ukrainian capital, Kiev, IMF mission chief Nikolay Gueorguiev declined to say how big the initial tranche of aid would be.
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 will contract 3 percent this year, weakened by years of mismanagement and political turmoil.
The bailout from the IMF will 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’s new leaders on Wednesday announced a radical 50 percent increase in the price of domestic gas from May 1, meeting an unpopular condition for IMF aid that Yanukovich had refused before he was ousted last month.
Writing by Timothy Heritage, Editing by Elizabeth Piper nL5N0MO1O9