by Sergei Ruzhtsky
KIEV, July 29 (Xinhua) -- As the International Monetary Fund (IMF) has greenlighted a handsome loan for Ukraine, local analysts said Thursday that the credit would help steer the cash-strapped country through the aftermath of the global financial crisis.
Meanwhile, they said that no less important than the IMF standby credit, worth about 15 billion U.S. dollars, is the resumption of cooperation between the Eastern European country and the international organization.
REJOINING HANDS AFTER FALLING OUT
The worldwide financial firestorm that erupted in mid-2008 hit Ukraine's economy hard, particularly its banking sector, prompting its government to turn to the IMF for help.
In late 2008, the IMF approved a 16-billion-dollar rescue deal for Kiev. But after three tranches, payments were frozen when the then Ukrainian government insisted on relaxing austerity measures despite IMF opposition.
Following his inauguration early this year, President Victor Yanukovych started trying to revive relations with the IMF, and has made some painful decisions in line with the organization's requirements, including cutting budget spending, implementing vital reforms and raising gas prices.
His efforts paid off months later when the IMF mission in Ukraine decided to recommend the IMF board to renew assistance for the country, which was one of the hardest hit in the global financial crisis, with its economy contracting 15 percent last year.
The IMF eventually endorsed the latest loan on Wednesday, with its first tranche being available immediately and the remainder to be disbursed upon quarterly reviews.
The new deal requires the Ukrainian government to keep its budget deficit within 5.5 percent of gross domestic product this year and 3.5 percent in 2011. Accordingly, the debtor has promised to reduce the figure to 4.99 percent this year.
