Ukraine is bailed out by the IMF

The International Monetary Fund (IMF) has been an active player in dealing with the global financial crisis following its recent bailout of the Icelandic financial system.

The Ukraine is now the latest beneficiary as in a matter of days, following Iceland’s $2.1 billion bailout, the International Monetary Fund has announced a $16.5 billion loan to the Ukraine, in a bid to save the country’s banking system.

It will be a 24-month loan and it is conditional on parliamentary approval although the Ukrainian government has been less than decisive thus far in the economic crisis.

Legislation is needed in order to help support the country’s banks and balance the budget in order to reduce the current-account deficit.

The IMF is adamant that it is not a case of the money but more the principal that the country must also do its part, in order to create the necessary infrastructural changes to their own systems, and that is why the IMF is pushing for a more flexible exchange rate and reforms.

So far Iceland, Pakistan, Hungary and Ukraine have asked for $20 billion of emergency loans from the IMF to help repay debt and they are likely to be followed by Belarus.

The economies of Eastern Europe are currently being kept afloat by investors who have lost money and are now investing in the riskier stocks of the emerging markets and currencies.

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