The International Monetary Fund (IMF) approved a $17 billion aid deal for Ukraine, even as Kiev fought to prevent pro-Moscow separatists from grabbing another chunk of the country. Greenlighting a rescue programme for an interim government, which took power after an uprising two months ago, IMF chief Christine Lagarde said it was crucial to strengthen Kiev’s economy.
“Urgent action was necessary,” the Fund’s managing director said, after her executive board’s approved of the plan. Deep-seated vulnerabilities together with political shock have led to a major crisis in Ukraine, she warned. “The economy is in recession, fiscal balances have deteriorated, and the financial sector is under significant stress.”
The global crisis lender’s decision opens the way for an immediate deployment of $3.2 billion to Kiev, which the Fund said has pledged to implement tough reforms. Those include slashing subsidies for fuel, cutting a large fiscal deficit, getting more control on salary increases, reducing corruption, and strengthening a frail banking system.
