Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Kiev Seeks IMF Letup

KIEV -- Ukraine, worried that austere economic reforms are strangling industry, is hoping to persuade the IMF to relax tight conditions on monetary policy.


An IMF program agreed in April to support a $1.57 billion standby loan has produced rapid results. Last year's double-digit monthly inflation slowed to 4.8 percent in June and government forecasts for this month are about the same.


But President Leonid Kuchma, who holds the reins on Ukraine's economic reforms, says monetary control has been too tight, too fast. Ukraine, he says, will be unable to reach International Monetary Fund monthly inflation targets of 1 to 2 percent by December.


"The IMF's policy on Ukraine has to be different from its policy in Zimbabwe, where they need to develop the economy from scratch," said Kuchma's economic adviser Anatoly Halchynsky.


"We need to capitalize on the potential of our industrial base, which means correcting our credit policy." That, he says, means year-end monthly inflation of about 4 percent.


The IMF says budget deficit and year-end inflation targets are not open to negotiation. Ukraine last month qualified for the second instalment of the IMF loan and the third $365 million drawing is scheduled for mid-September.


So far, government officials holding talks with an IMF mission on the third tranche have discussed their concerns without producing specific figures for renegotiation.