The International Monetary Fund has agreed to release another $1 billion in its $17.5 billion aid package for the former Soviet nation fighting pro-Russian separatists in the Donbass region of the country.
“The IMF board took the decision to grant Ukraine one billion dollars,” President Petro Poroshenko wrote on his Facebook page, seeing it as “another sign of the reforms under way in Ukraine,” reported AFP.
Ukraine is desperate for cash as its economy slowly recovers in the face of a blockade against trading with the breakaway republics by Ukrainian war veterans, which is slowing economic growth. Poroshenko recently supported the efforts of the volunteers to not allow goods into rebel areas from government controlled territory.
The nation has also been slow to deal with a festering corruption problem that has persistently strangled growth. The total amount now released including this tranche will be $8.4 billion. The head of Ukraine’s Independent Association of Banks in Ukraine Roman Shpek has said that nearly all the money would go into refinancing the former Soviet republic’s outstanding debt to the IMF, reported AFP.
“Corruption needs to be tackled decisively. Despite the creation of new anticorruption institutions, concrete results have yet to be achieved,” David Lipton, acting chair of the IMF board and first deputy managing director said in an IMF statement announcing the release of the funds.
“Notwithstanding the large fiscal adjustment, public debt remains high.”
“This will send a clear message to those who have sought to unlawfully exploit the banking sector to their own advantage,” Valeria Gontareva, governor of the NBU, said in the statement.