WASHINGTON - The International Monetary Fund approved Wednesday a $17.5 billion aid plan for crisis-wracked Ukraine, whose economy is reeling from a pro-Russia insurgency in its industrial heartland.
International Monetary Fund Managing Director Christine Lagarde on Feb 20, 2015, at EU Headquarters in Brussels.
The four-year financial aid programme replaces an existing IMF program, less than a year old, that proved inadequate to stabilize Ukraine's finances as the country fights the insurgency in the east.
"This new four-year extended arrangement will support immediate economic stabilisation in Ukraine and a set of deep and wide-ranging policy reforms aimed at restoring robust growth over the medium term and improving living standards for the Ukrainian people," said IMF managing director Christine Lagarde in a statement.
Five billion dollars will be disbursed immediately, the global lender said.
The new program is better-suited to the more protracted nature of Ukraine's balance-of-payments needs, providing more time, more flexibility and better financing terms, Lagarde said.
Unveiled by Lagarde in early February, after the IMF reached a preliminary agreement with Ukrainian authorities in exchange for economic reforms, the IMF aid was to be part of about $40 billion in assistance from the international community.
The IMF statement said the new loan is "based on a comprehensive economic reform program supported by the Fund as well as by additional resources from the international community."