UPDATE 1-IMF says Ukraine needs modified bailout if it loses the east [View all]
Source: Reuters
May 1 (Reuters) - Ukraine's loss of its territory in the east would force the International Monetary Fund to re-design its $17 billion bailout of the country, and would require additional financing, the Fund warned on Thursday.
The IMF also said a deterioration in relations between Ukraine and Russia, which buys a quarter of Kiev's exports, could further hurt Ukraine's economy and also force an adjustment to its bailout, approved by the IMF board on Wednesday.
"A long-lasting disruption of relations with Russia that depresses exports, investment, and growth, or a loss of economic control over the East that reduces budget revenue would require a significant recalibration of the program and additional financing, including from Ukraine's bilateral partners," the IMF said in a staff report released on Thursday.
In outlining the risks to the program, the IMF also warned of uncertainty about the Ukraine government's commitment to a wide program of reforms, many of them politically unpopular, especially after presidential elections on May 25.
Read more: http://www.reuters.com/article/2014/05/01/ukraine-crisis-imf-idUSL2N0NN0UZ20140501?rpc=401&
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