International Monetary Fund Managing Director Christine Lagarde said the global lender is likely to send a team to Ukraine soon as the country seeks financial aid following the ouster of President Viktor Yanukovych.
“We are ready to engage,” Lagarde told Stanford University students today in California. “We will probably shortly send some technical assistance support to the country because this is our duty to a member, if that member asks,” which is “clearly what is likely to happen,” she said.
With Yanukovych on the run after weeks of anti-government protests turned deadly, Ukraine’s new leaders are grasping for a financial lifeline as Russia weighs the fate of a $15 billion bailout it granted in December. The selection of a national unity government was delayed today to Feb. 27 as Acting President Oleksandr Turchynov attempts to win agreement with protest leaders who orchestrated the revolt.
He indicated yesterday that a new administration should be formed quickly to secure as much as $35 billion in financial aid. The U.S. and the European Union have pledged aid to the new administration.
“To go further, to support better this economy, we need to engage in a dialog in which the Ukrainian authorities, once designated, will seek out the help and support of the IMF,” Lagarde said.
Sergei Storchak, Russia’s deputy finance minister, said Ukraine faces a “high” chance of defaulting on its sovereign debt, while the new central bank chief in Kiev said talks were under way with creditors, including the IMF.
The IMF made two loans to Ukraine over the past six years, including a $15.6 billion bailout in 2010 that it stopped disbursing the following year after the government refused to raise domestic natural-gas prices to trim the budget deficit.
In an interview earlier this week, Lagarde said the fund will help Ukraine “if it needs policy advice, financial support and wants to actually undertake a reform of its economy.”