Ukraine Unlocks $5.5 Billion IMF Loan in Preliminary Accord

(Bloomberg) -- Ukraine sealed a preliminary $5.5 billion loan program with the International Monetary Fund, giving President Volodymyr Zelenskiy a boost before peace talks with Russia.

The staff-level agreement includes policies to be carried out by Ukraine’s government to underpin the three-year program, IMF Managing Director Kristalina Georgieva said in a statement late Saturday after a phone call with Zelenskiy.

“The president and I agreed that Ukraine’s economic success depends crucially on strengthening the rule of law, enhancing the integrity of the judiciary, and reducing the role of vested interests in the economy,” Georgieva said.

Ukraine had originally targeted the agreement for September. Obstacles included attacks on an ex-central bank governor and uncertainty over the country’s biggest lender, Privatbank. The bank’s 2016 nationalization is being challenged by its former owners, which include a billionaire former business partner of Zelenskiy.

The program “aims to boost economic growth, to root out corruption actively and to raise the living standards of each Ukrainian,” Zelenskiy said in a statement.

The deal is subject to approval by the IMF’s management and executive board, and is conditional on up-front policy actions by Ukraine.

With a Russian-backed armed separatist rebellion sapping Ukraine since 2014, IMF assistance has stabilized the economy and lured foreign investors to local government bonds. Zelenskiy will hold his first face-to-face talks with Russian President Vladimir Putin on Monday in Paris, where they’ll be joined by the leaders of Germany and France.

To contact the reporter on this story: Daryna Krasnolutska in Kiev at dkrasnolutsk@bloomberg.net

To contact the editors responsible for this story: Balazs Penz at bpenz@bloomberg.net, Tony Czuczka, Matthew G. Miller

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