Ukraine Tries to Sooth Investors As IMF Negotiations Drag On

ReutersTymoshenko meeting IMF official Ceyla Pazarbasioglu, left, in Kiev on Friday.
KIEV -- Ukraine's feuding president and prime minister sought to calm fears Friday over the country's markets as negotiations dragged on for a multibillion-dollar IMF rescue loan.

"The situation on the international and domestic markets is not simple, but I am a convinced optimist and am sure that if we take systematic steps, we will find the right answer," President Viktor Yushchenko said in an address to the International Monetary Fund.

Prime Minister Yulia Tymoshenko went further, denying that the country was in crisis.

"Unlike many countries of the world, Ukraine today lives a calm financial and economic life," Tymoshenko said.

Fitch Ratings, meanwhile, downgraded Ukraine's long-term foreign and local currency ratings to B+ from BB minus, maintaining its "negative" outlook.

Fitch explained that the downgrade reflected its concern that "the risk of a financial crisis in Ukraine involving a large depreciation of the currency, further stress in the banking system and significant damage to Ukraine's real economy is significant and rising."

Ukraine is in desperate need of financial assistance after the international downturn wreaked havoc with its banking sector and left its hryvna currency reeling. The country's top banker, Oleskandr Savchenko, said Friday that he expected the IMF to offer up to $15 billion. IMF officials have consistently refused any comment on the talks.

Also Friday, Tymoshenko said she supported the nationalization of the country's sixth-largest bank, Prominvestbank, which has spent a week in receivership after a run on its deposits.

Sberbank's Ukraine chief, Vyacheslav Yutkin, said the Russian bank was interested in buying Prominvestbank, Ekonomicheskie Izvestia reported Friday.

(AP, Reuters, Bloomberg)