Ukraine Calls for Quick IMF Action
KIEV, Ukraine (AP) _ Seeking to avoid an economic meltdown in the wake of Russia’s financial crisis, President Leonid Kuchma on Tuesday called for quick approval of a $2.2 billion IMF loan.
``Approval of the loan would support Ukraine both politically and economically, and would serve as confirmation by international financial institutions that Ukraine is a country to do business with,″ Kuchma told reporters.
The International Monetary Fund had been expected to consider the loan to Ukraine by the end of August, but the action was delayed to determine the effects of Russia’s financial crisis on Ukraine.
Ukraine, which ships $10 billion in exports to Russia yearly, a third of its total foreign sales, has been among the countries hit hardest by the turmoil in Russian financial markets.
The value of local currency, the hryvna, has fallen steadily in the past two weeks and prices are rising in shops and markets.
The government has responded by selling some of its dollar reserves to bolster the value of local currency. As a result, the reserves have tumbled from $1.75 billion in July to about $900 million.
Officials said Ukraine urgently needs the IMF loan to replenish its foreign reserves, which are used to guarantee payment for vital imports.
Such massive selling of dollars sparked fears that Ukraine could run out of reserves by the end of September.