IMF Backs US$3.9 Billion Loan For Ukraine

The International Monetary Fund has approved a new $3.9 billion loan agreement for Ukraine, a small victory for President Petro Poroshenko ahead of the presidential election next year.

The fund's decision, announced December 18, includes a first installment of $1.4 billion that is expected by December 25. The fund's board said decisions about the next remaining two installments would come in May and November.

IMF aid had effectively been frozen since April 2017 due to the country’s sputtering efforts to implement major economic reforms and tackle corruption. That included overhauling the governance structure and payment systems for the state-owned gas company, Naftohaz.

"Such decisions that come from leading world financial institutions ensure stability of our progress and strengthen resilience of Ukraine against severe internal and external challenges," Poroshenko said in a statement.

The prospect of securing more IMF loans has allowed the government, which must service a rising debt burden next year, to seek new debt on world markets.

It also opens the door for the European Union and other foreign donors to provide more aid.

Poroshenko is running behind in election polls ahead of the March 31, 2019, vote, as many Ukrainians have grown weary of promises to root out the country's notorious corruption problems.