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Washington: The International Monetary Fund (IMF) executive board gave final approval to a new loan package for Ukraine and released USD 1.4 billion for immediate use.

The IMF had agreed on the USD 4 billion, 14-month loan in mid-October but the board was waiting for the government to follow through with a series of economic policies before approving the aid to the war-torn nation, including raising gas and heating rates.

Another key step was approval of the 2019 budget late last month with a deficit of about 2.3 per cent of GDP. “The Ukrainian authorities have successfully restored macroeconomic stability and growth, with support from the international community,” IMF number two David Lipton said in a statement.

“The authorities have taken important steps” to mitigate risks to the program, he said, but stressed that the “full and timely implementation of the program will be critical for its success in light of the difficult challenges.” The gas price hike was a sensitive issue for the cash-strapped country as its pro-Western leadership faces presidential and parliamentary elections in 2019.

The IMF also has stressed the need for continuing to protect low-income households. And Lipton said progress on anti-corruption reforms and privatization “will help attract investment and improve the business climate more broadly.”

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