IMF delays more aid to Ukraine to assess cost of blockade

Sun Mar 19, 2017 1:43pm GMT
 

By Matthias Williams and Pavel Polityuk

KIEV, March 19 (Reuters) - The International Monetary Fund has postponed a decision to disburse more aid to Ukraine in order to assess the impact of an economic blockade Kiev imposed on separatist-held territory, the IMF and Ukrainian authorities said on Sunday.

The IMF's Executive Board was due to meet on Monday to approve more assistance as part of a $17.5 billion bailout programme for the war-torn nation, in exchange for the pro-Western government passing reforms and tackling corruption.

But Ukraine and the IMF must first assess the fallout from a decision last week by President Petro Poroshenko to suspend all cargo traffic with rebel-held territory, the finance ministry and central bank said.

The decision follows an existing blockade by Ukrainian activists and MPs that has prevented coal supplies from reaching power plants and the steel industry since late January.

The central bank has previously said economic growth could nearly halve this year to 1.5 percent if cargo traffic did not resume.

"Updated macroeconomic forecasts are to be provided to the IMF," the central bank said in a statement on Sunday.

"Dialogue and technical consultations with the IMF are continuing," it said, adding that the bank would hold an unscheduled monetary policy meeting on Monday.

The IMF said in an email its board meeting was delayed "to allow staff time to assess the implications of recent developments for the program. Staff expect to announce a new date soon."   Continued...

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