IMF recommends Ukraine cut energy subsides, liberalize foreign exchange market

09:54, 01 November 2013
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The International Monetary Fund (IMF) on Thursday recommended Ukraine cut its energy subsides and set up a floating exchange rate to cope with financial instability, according to Xinhua.

"Ukraine's fiscal deficit is too high," the IMF resident representative in Ukraine Jerome Vacher told a conference here organized by the international rating agency Fitch Ratings.

According to the IMF official, Ukraine should adopt the measures to put the economy on the path of sustainable growth.

The global lender insists Kiev cut its energy subsides, which account for 4.875 billion U.S. dollars or around 3 percent of the country's GDP annually, and end its foreign currency interventions.

Ukraine uses market interventions to support the local currency, the hryvnya, which has been pegged at about 8 to the dollar since early 2010.

Ukraine needs to fulfill the lender's requirements to obtain a new IMF loan worth 15.36 billion dollars.

The former Soviet republic needs a fresh injection into its economy to cope with a fiscal deficit projected to hit 3.2 percent of its GDP this year.

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