UKRAINE, July 14. The Ukrainian government is planning to sign a new memorandum on economic and financial policies and a letter of intent on cooperation with the International Monetary Fund (IMF) by the end of this week.

Ukraine expects that the first tranche from the IMF under new loan cooperation under the Stand-By Arrangement (SBA) will total more than UAH 10 billion (about USD 1.3 billion).

As reported, an IMF mission that worked in Kyiv June 21 through July 3, 2010, decided to propose that the IMF Executive Board lend USD 14.9 billion to Ukraine under the Stand-By Arrangement. The fund, in turn, expects legislative changes concerning the budget and the financial sector. The IMF also insisted that the deficit of the consolidated budget be limited to 5.5% of GDP in 2010 and 3.5% of GDP in 2011.

Moreover, the IMF put forward a condition under which the Ukrainian authorities should increase prices and tariffs for gas, carry out tax and pension reform and strengthen the independence of the National Bank of Ukraine.

The Ukrainian parliament has already decided to reduce the expenditures of the budget: its deficit has been cut from 5.3% of GDP to 5.0% of GDP.

Source: Ukrinforum