IMF approves US$1b in Ukraine aid after long delay

[WASHINGTON] The International Monetary Fund on Wednesday resumed its bailout of war-torn Ukraine, approving disbursement of US$1 billion from an aid package that had been held up in part on corruption concerns.

Kiev had been waiting for the resumption of lending since August of last year in a US$17.5 billion programme intended to help stabilise the country after the 2014 ouster of pro-Russian President Viktor Yanukovych.

The country has suffered deep economic contractions after two years of war, with GDP contracting 9.9 per cent in 2015.

Wednesday's decision by the IMF Executive Board brings the total amount disbursed to about US$7.62 billion, the Fund said in a statement.

The Fund's Executive Board said it approved the disbursement despite Ukraine's failure to meet several program targets, including on limiting debt, boosting reserves and easing foreign exchange restrictions.

IMF Managing Director Christine Lagarde had said in February that a resumption of funding could be difficult without substantial anti-corruption and reform efforts by Ukraine. The reforms called for have been unpopular but local lawmakers have approved measures proposed by the Fund.

The US$1 billion approved on Wednesday was short of the US$1.6 billion expected in the latest tranche of lending but the Fund did not explain the difference.

AFP