Ukraine says new IMF credit will stimulate growth, reassure markets

Ukraine says new IMF credit will stimulate growth, reassure markets

© Valentyn Ogirenko / Reuters

In a statement, Kiev's Finance Ministry said the disbursement of the second tranche of aid under a four-year Extended Fund Facility (EFF) program would be used to replenish Ukraine's National Bank reserves.

"Combined with the deep and ambitious reforms being carried out by the government of Ukraine, the new tranche will encourage growth in the economy and reassure financial markets both domestically and internationally," it said.

The IMF approved the release of the new credit after apparently endorsing the passage through Ukraine's parliament of crucial laws reforming the gas sector, strengthening the banking system and fighting corruption.

"This (the IMF disbursement) is a concrete endorsement of the progress our country has made in recent months on our reform program. This money will help towards our goal of returning the country to positive economic growth," Finance Minister Natalia Yaresko said in a separate statement.

"I am confident we will make Ukraine stronger, more prosperous, more competitive, and more transparent."

The second tranche is part of an EFF program totaling $17.5 billion. The first $5 billion tranche was disbursed immediately after the program was approved by the IMF in March 2015.

(Writing by Richard Balmforth; Editing by Mark Heinrich)