IMF could release new funds to Ukraine at end of July

The International Monetary Fund signaled Thursday it could release $1.7 billion in bailout funds next week to Ukraine as the country reels from civil war and seeks private-sector debt relief.

The IMF executive board is tentatively scheduled to meet on July 31 to decide on the second disbursement of the country's four-year support package, said Fund spokesman Gerry Rice.

Approval of the payout is "possible provided our usual conditions are met," Rice said at a regularly scheduled news conference.

In early July, the IMF said that the second disbursement would come after completion of certain, unspecified actions and in conditions that would allow IMF staff to assess whether Ukraine's public debt is sustainable "with high probability".

The IMF awarded Ukraine a four-year, $17.5 billion support program in March as its economy neared collapse after more than a year of civil war; an initial $5 billion was released.

The Washington-based institution, with 188 member nations, originally conditioned its aid program on the country achieving a deal with private creditors that would reduce its debt payment burden by $15.3 billion over the coming four years.

Kiev has sought a write-off of some of the debt but the Ad Hoc Committee of Ukraine's Bondholders -- mainly four US investment and hedge funds -- say that lengthening the payment period on the debt would be enough to achieve the goals.

"The authorities and the ad hoc creditors committee have been making good progress in their discussions," Rice said, although no formal agreement has been reached.

"Further progress is expected by July 31," Rice said.

The IMF spokesman meanwhile warned that Kiev should "avoid policy reversals" on reforms demanded by the IMF in exchange for the bailout.

Asked about the IMF's seeming easier bailout approach with Ukraine compared with its hard line on Greece, Rice noted that they were "two very different countries -- very different set of circumstances".

"The government there (Ukraine) has made a commitment, they've been implementing reforms, there's been a lot of progress there," he said.
Source: AFP