The International Monetary Fund said on Sunday it had reached an agreement in principle with Ukraine for a $16.5 billion loan package to ease the effects of the financial crisis, Reuters reported. "An IMF staff mission and the Ukraine authorities have today reached agreement, subject to approval by IMF management and the executive board, on an economic program supported by a $16.5 billion loan under a 24-month stand-by arrangement," IMF Managing Director Dominique Strauss-Kahn said in a statement. "Consideration by the board would follow approval of legislative changes to Ukraine's bank resolution program," he added. The Washington-based lender said its staff in Kiev and Ukraine authorities had reached an agreement on a package that would meet the balance of payments needs created by the combined effects of the collapse of steel prices and the global credit turmoil. "The authorities' program is intended to support Ukraine's return to economic and financial stability, by addressing financial sector liquidity and solvency problems, by smoothing the adjustment to large external shocks and by reducing inflation," Strauss-Kahn said. "At the same time, it will guard against a deep output decline by insulating household and corporations to the extent possible." He said the package was equivalent to 800 percent of Ukraine's quota at the fund. Each IMF member country is assigned a quota based on its size in the world economy and determined the amount of money it can lend. Under normal IMF lending program, countries can draw up to 300 percent, or three times, their quota. "The strength of the program justifies the high level of access," Strauss-Kahn added.
