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IMF Eases Lending Policy in Move Helping Ukraine in Bond Feud

  • Fund to allow lending to countries in arrears to sovereigns
  • Russia calls decision 'rushed and biased,' vows court battle

The International Monetary Fund loosened its policy on lending to countries that default on their debts to sovereign creditors, easing one potential obstacle for bailout money continuing to flow to Ukraine if the nation fails to repay a Russian-held bond this month.

The IMF’s executive board on Tuesday approved a change that will allow the Washington-based fund to continue lending to countries that fail to pay debts held by other nations. Previously, the IMF prohibited itself from lending to borrowers that fall into so-called official arrears.