MOSCOW (Sputnik) – IMF launched a four-year loan program of $17.5 billion for Ukraine’s government in March. According to Lagarde, Kiev is determined to tackle economic imbalances in Ukraine and is set on achieving sustainable growth, which warrants the support of the international community.
"The IMF, in general, encourages voluntary pre-emptive agreements in debt restructurings, but in the event that a negotiated settlement with private creditors is not reached and the country determines that it cannot service its debt, the Fund can lend to Ukraine consistent with its Lending-into-Arrears Policy," Lagarde said in a letter, published on the official IMF website on Friday.
The IMF managing director met with Ukrainian Prime Minister Arseniy Yatsenyuk and the country’s Finance Minister Natalia Jaresko on Wednesday.
Following the meeting, Yatsenyuk stressed that Ukraine’s debt to private creditors must be restructured and expressed hope that 2016 would be the first year of economic growth in the country.
"Rapid completion of the debt operation with high participation is vital for the success of the program, since Ukraine lacks the resources under the program to fully service its debts on the original terms."
Jaresko, who has been seeking a write down of Ukraine’s debt, said that Kiev would have to impose a moratorium on certain debt repayments if an agreement with private creditors is not reached during the summer of 2015.
Ukraine has been suffering from a major economic crisis amid an ongoing conflict in the southeast, where Kiev launched a military operation last year, in response to local residents’ refusal to recognize the new government, which came to power in February 2014 as a result of a coup.