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Ukraine: IMF Says Reforms Must Precede Major Loan

Washington, 11 July 1997 (RFL/RL) - The International Monetary Fund (IMF) has told Ukraine it will NOT be able to go ahead with a large, long term loan until more reforms are in place, but will consider a regular one-year credit program.

Sources at IMF headquarters in Washington say a mission of officials completed a two-week review of Ukraine's situation in Kyiv today and told senior officials of their decision.

Ukraine and the IMF had agreed to move ahead on a loan of up to $3 billion under the Extended Fund Facility late last year, but the sources say the government was not able to implement as many of the structural reforms as had been envisaged last winter.

However, the sources say, the fund has decided to give priority to a new one-year stand-by loan for Ukraine and the mission of IMF officials will return to Kyiv in the next two weeks to work out details. The aim, say the sources, is to have it approved by the end of August.

IMF sources say the mission was pleased with progress made in policy this year, including low inflation and a stable exchange rate. However, they say more structural changes are needed before major loans could be approved.