Oct. 21 (Bloomberg) -- Ukraine may sign a loan worth as much as $15 billion with the International Monetary Fund next week as it seeks to inject cash into domestic banks and avoid an economic meltdown, Prime Minister Yulia Timoshenko said.

Talks on the loan are ``90 percent'' completed and may finish tomorrow, Timoshenko told reporters in the Ukrainian capital Kiev today. Once signed, the pact will need to be approved by lawmakers. A vote may take place by the end of the week, she said.

``The talks are almost finished with the IMF and we've almost agreed on what necessary changes to laws we have to make to get the loan,'' Timoshenko said. ``We want to get IMF support as soon as next week.''

Ukraine is struggling to keep the hryvnia from falling and its banks from running out of cash as emerging market economies in eastern Europe increasingly feel the pinch of the global economic crisis. The situation in Ukraine is exacerbated by the fastest inflation in Europe and a split in the governing coalition that stalled budget talks and forced an early election in December.

Ukraine will use the IMF loan ``to bolster the central bank's foreign currency reserves and to support the banking system,'' Timoshenko said. Ukraine joins Hungary and Iceland, whose three largest banks collapsed this month, in lining up potential IMF funding.

Declining Hryvnia

The hryvnia weakened for a fifth consecutive day against the dollar. The currency dropped 0.4 percent to 5.5400 per dollar by 6:49 a.m. in Kiev, from 5.4975 late yesterday. Ukraine's inflation rate, at 24.6 percent in September, is the highest in Europe, and its central bank may sell more reserves to back the national currency.

The Kiev-based central bank called for an increase in interbank lending. ``We have enough resources,'' First Deputy Central Bank Governor Anatoliy Shapovalov said, adding that the volume of interbank loans had fallen by 21 percent as of today.

The country's political tussle and economic instability have hampered the government's ability to stem the influence of the global financial crisis. Finance Minister Viktor Pynzenyk said today that economic growth for next year will dip below the 6 percent prediction used in drafting the 2009 state budget.

The Cabinet wants to increase investments and sell state assets to boost economic growth, said Pynzenyk. ``We are now compiling a list of potentially attractive companies,'' he said.

Timoshenko's alliance today physically blocked parliament's meeting chamber, preventing a vote on financing the early election. Yesterday, Yushchenko postponed the election by one week to Dec. 14.

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

Last Updated: October 21, 2008 13:26 EDT