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Ukraine Expects First IMF Loan Tranche By March 13

Ukrainian Prime Minister Arseny Yatsenyuk speaks during a government meeting in Kyiv. (file photo)
Ukrainian Prime Minister Arseny Yatsenyuk speaks during a government meeting in Kyiv. (file photo)

Ukrainian Finance Minister Natalie Jaresko says Kyiv expects the first tranche of $5 billion under a new four-year International Monetary Fund (IMF) bailout program to be disbursed no later than March 13.

The IMF on March 11 approved the $17.5 billion loan for Ukraine to stave off default.

Jaresko said at a briefing in Kyiv on March 12, "The tranche, which we expect tomorrow if not today, will enable us to increase reserves."

She said the central bank would receive $2.2 billion of the money, which will be used to stabilize the national currency.

The hryvnya has lost more than two-thirds of its value against the dollar over the past year amid the conflict with Russian-backed separatists in the east.

Jaresko said the remaining $2.8 billion would go to the government.

She announced that Kyiv would launch a program to privatize many of the country's 3,300 state-owned companies by the end of this year.

Jaresko also said Kyiv on March 13 will begin talks with its creditors on restructuring its debt, adding that a solution should be found within at least two months.

Jaresko did not specify which debt might be restructured.

Ukraine's creditors include top fund managers Franklin Templeton, Blackrock, and PIMCO.

Questions remain over whether Russia, which holds $3 billion out of the total $17 billion worth of Ukraine bonds, will participate in the restructuring.

The IMF said successful debt restructuring would be "a key consideration" for the payment of further tranches.

The institution warned in a report released March 12, that efforts to restore financial stability in Ukraine face "exceptionally high" risks from further conflict and disgruntled creditors.

Ukraine's overall financial rescue package amounts to more than $40 billion.

That includes the $17.5 billion of IMF loans, a further $7.5 billion in lending from other international organizations, and $15.3 billion in debt relief that Ukrainian officials hope to gain from bondholders.

Based on reporting by Reuters and AFP
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