The International Monetary Fund is prepared to give Ukraine up to $14 billion to help stabilize the country`s financial system, a senior Ukrainian official said on Friday, as it sought to cool nerves over its debt and currency, Reuters reported.
IMF officials met the country`s leaders Friday and an adviser to the ex-Soviet state`s president said two to three weeks were needed to clinch an agreement on extending a credit facility.
Other countries, like Hungary Iceland and Serbia, are also seeking help to find remedies to jolts sustained from the world financial crisis. Ukraine`s approach is complicated by divisions in its leadership after a government break-up.
Oleksander Shlapak, deputy head of President Viktor Yushchenko`s secretariat, said that it first had to work out criteria with the IMF under which Ukraine could qualify for such a credit.
"The mission is only studying the situation and in the course of a week -- Tuesday or Wednesday -- can propose a list of demands on the basis of which we can talk about a credit," Shlapak told a news conference.
"I see the situation like this -- in the next two-three weeks, we could come to a joint agreement with the IMF mission."
Shlapak said Ukraine would be entitled to a credit of about $10-14 billion on the basis of its quotas in the Fund.
He said that should terms be agreed, Ukraine could consider consulting the World Bank, the European Bank or other investors to ensure favorable ratings from international agencies.
Analysts are concerned about the weakness of the hryvnia currency and the stability of banks. The cost of insuring Ukraine`s debt against restructuring or default rose sharply on Friday to a mid-price of 2,000 points -- meaning it costs $2 million a year over five years to insure $10 million of debt.
The IMF mission was undertaking its work with Ukraine embroiled in the latest episode of a long-running political crisis pitting President Viktor Yushchenko against Prime Minister Yulia Tymoshenko.
The two allies from Ukraine`s pro-Western "Orange Revolution" of 2004 are now openly hostile to each other.
Tymoshenko Thursday said the Fund was considering credit ranging from $3-14 billion, but added that any credit was contingent on postponement of an early election called by the president. The Fund denied it had made any such link.
The mission started its day by meeting Tymoshenko and its head, Ceyla Pazarbasioglu, was quoted as telling the prime minister the Fund was "ready to provide help to IMF member-states."
"We are working very hard and are prepared to do everything within our power to help you in working out economic policy," Interfax news agency quoted Pazarbasioglu as saying.
A government spokeswoman confirmed Pazarbasioglu had made the comments during the meeting.
Ukraine faces its third election in as many years after Yushchenko accused Tymoshenko of breaking up the governing coalition and dissolved parliament.
Tymoshenko denounces an election as "reckless" and her allies have launched court action to stop the poll.
The spokeswoman said Tymoshenko had told the mission: "It is in Ukraine`s interests to secure vital financial assistance."