Ukraine hopes for financial aid soon

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IOL pic feb28 ukraine new prime minister Reuters Ukraine's Prime Minister Arseny Yatseniuk speaks during a session of Parliament in Kiev on February 27, 2014. Picture: Konstantin Chernichkin

Kiev - Ukraine hopes to receive international financial aid soon and is determined to meet all the conditions needed to secure support from the International Monetary Fund (IMF), Prime Minister Arseny Yatseniuk said on Friday.

An IMF mission is due in Kiev next week for talks with Ukraine's new leaders, who have said the heavily indebted country needs at least $35 billion over two years to stave off the bankruptcy.

“I hope that in the short-term we will receive foreign currency which will help us to boost foreign reserves and to stabilise the situation,” Yatseniuk told reporters.

Ukraine's foreign currency reserves dropped to $15 billion from $17.8 billion on February 1, with the central bank attributing the fall to intervention moves to prop up the weakening national currency, the hryvnia.

Since then, the central bank has allowed the hryvnia to fall. The Ukrainian currency hit 10.50 against the dollar on Friday, from 8.2 at the beginning of the year.

Stepan Kubiv, Ukraine's central bank governor, told reporters on Friday the bank had limited foreign currency withdrawals from banking deposits to 15 000 hryvnia ($1 500) per day in a move to tame the volatility.

He also said Kiev had enough reserves to pay off creditors but did not specify over which time period.

An EU diplomat said on Thursday Ukraine's new rulers told the European Union the country's economy needed an immediate infusion of $4 billion. Kiev owes Russian Gazprom over $1 billion in gas payments from 2013 and 2014.

Once the situation has stabilised, the government will ask the central bank and commercial banks to start large-scale lending to the economy, Yatseniuk said. - Reuters

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