IMF extends talks with Ukraine on aid package

by Reuters
Thursday, 20 March 2014 17:06 GMT

(Adds details, market reaction)

WASHINGTON, March 20 (Reuters) - The International Monetary Fund on Thursday extended talks IMF officials are holding with Ukraine on an aid package until March 25, saying progress had been made but more time was needed to wrap up the mission.

"The mission has made significant progress in discussing with the Ukrainian authorities the policies to put the country on the path of economic reform, sound governance, and sustainable growth while protecting the poor and vulnerable," IMF mission chief Nikolay Gueorguiev said in a statement.

"The authorities' comprehensive reform program covers a wide range of issues and additional work needs to be completed to advance program discussions."

Ukraine's hryvnia strengthened on the news, closing up 2.4 percent against the dollar, its strongest performance since March 5.

The mission had been scheduled to conclude on Friday.

The IMF team arrived in Kiev three weeks ago to assess the country's economic situation and discuss a possible bailout program. Ukraine's new government has said it desperately needs cash to cover expenses including gas import payment and avert a possible debt default.

Last week Ukrainian Finance Minister Olexander Shlapak said the government had to repay $10 billion of foreign currency debt this year.

If the debt of state gas company Naftogaz and the state highways construction company were added to this, the central bank's currency reserves, which stood at $15.4 billion as of Match 1, would not be able to cover the payments due, he said.

Kiev has promised to meet all requirements set by the IMF and the government hopes to receive the first tranche of a financial aid package in April.

Ukraine dollar bonds rose between 1 and 2 cents across the maturity curve on Thursday on speculation that the International Monetary Fund was preparing a statement on Ukraine. (Reporting by Timothy Ahmann; Additional Reporting by Natalia Zinets and Alessandra Prentice in Kiev; Editing by Paul Simao)

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