IMF bails out Ukraine

The International Monetary Fund has approved $16.4bn (€12.7bn) in emergency funding for Ukraine to stabilise the nation’s economy, which is being pummelled by falling export values, rising inflation and the effects of the global financial meltdown.

The two-year agreement allows the Eastern European country to receive $4.5bn (€3.5bn) immediately in exchange for agreeing to a series of financial reforms.

Among them are agreements governing flexible exchange rates, higher funding for unemployment insurance and banking recapitalisation.

“The Ukrainian economy, especially the banking system, is experiencing considerable stress,” IMF deputy managing director and acting chairman Murilo Portugal said in a statement.

“Falling prices for Ukraine’s major export, steel, have led to a substantial deterioration in Ukraine’s current account outlook.”

The IMF has already agreed to lend Iceland $2.1bn (€1.6bn) and is in talks with Hungary for an estimated $10bn (€7.8bn) to $12.5bn (€9.7bn) in loans.