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Ukraine approves memorandum on cooperation for IMF stand-by loan

07-15-2010 10:58 BJT

KIEV, July 14 (Xinhua) -- The Ukrainian cabinet on Wednesday approved a memorandum that was expected to help the country obtain an IMF stand-by loan.

Prime Minister Mykola Azarov said the memorandum would be signed and handed over to the IMF in the next few days.

"Our commitments are not easy, but match our plans on developing the country's economy. We need to stabilize the financial sector, to minimize budget spending and implement vital reforms," Azarov told the Cabinet.

Bowing to IMF pressure, the Ukrainian government took the painful step of announcing a 50-percent rise in the price of domestic gas from next month onward.

Azarov said the sharp gas price increase, an unpopular move but one that was expected to help cut the budget deficit, was necessary to secure the 14.9 billion-U.S. dollar IMF loan.

Deputy Prime Minister Sergey Tigipko said the memorandum would be reviewed during a meeting of the board of IMF directors on July 28.

"Ukraine hopes soon to receive the first 1.3 billion-dollar tranche," he said.

In early June the IMF mission to Ukraine proposed to the board of directors to provide the country with 14.9 billion dollars in loans within the framework of the IMF stand-by program.

Ukrainian lawmakers, in accordance with IMF requirements, reduced the budget deficit, setting it to a ratio of 4.99 per cent of GDP in 2010.

Ukraine is among the countries hit hardest by the global financial crisis, with its economy contracting 15 percent last year - the biggest contraction since the industrial collapse that followed the break-up of the then Soviet Union in 1991.

Editor:Jin Lin |Source: Xinhua

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