World Economy

Ukraine Desperate for IMF Aid

Ukraine Desperate for IMF Aid Ukraine Desperate for IMF Aid

With reports that Ukraine’s gas supply could be turned off imminently and fears that the country is on the brink of bankruptcy, Ukraine government officials told CNBC the country is relying on International Monetary Fund (IMF) aid to come to its rescue.

“This is a very serious financial crisis there’s no question, and we’re looking forward to the IMF board meeting and the IMF first tranche (of aid) because it’s a critical time,” Natalie Jaresko, finance minister of Ukraine, told CNBC Wednesday.

International financial aid of around $40 billion – with around $17 billion coming from the IMF – was pledged earlier this month but the money is yet to be released and is reliant on several reforms being introduced by the Kiev government.

Speaking to CNBC in Kiev, U.S.-born Jaresko said she was confident that the Ukraine government was doing it all it could to ensure the money was released swiftly.

“We’ve worked very quickly over the last two months to come to a program of Ukrainian reforms so I believe we will be doing everything we need to do to ensure that money does come, and comes as soon as possible.”

“Our government is committed, the parliament is committed and the Ukrainian people are committed to those reforms,” she said, adding that the money was expected to arrive sometime in the second week of March. “Timing-wise, I wish it was sooner,” she said.

  Could Need More

Although the $40 billion aid package was substantial, Ukraine could need more, the finance minister said.

“This package is enough to stabilize the situation but if we are going to return to growth, if we are going to rebuild and regain access to our territory we are going to need something much greater and much more support.”

Ukraine is running out of money fast. At the end of January, the foreign currency reserves held by the Ukraine central bank were $6.4 billion, with reserves pressured over the last year by interventions to prop up the weakening currency, debt repayments to foreign creditors and gas payments to Russia.

“We strongly believe that there is not a threat of any default situation,” Dmytro Shymkiv, deputy head of the presidential administration of Ukraine, said.

“There are very clear negotiations with the IMF as to how we will succeed, the IMF and international community are supporting us, and there is a full assurance that things will happen, it’s just that, technically, things are not happening yet.”