Ukraine obtains first USD 4.5 bln tranche of IMF loan

Ukrainian Finance Minister Viktor Pynzenyk said yesterday that Ukraine has gotten the first USD 4.5 bln tranche from the International Monetary Fund’s USD 16.4 bln two-year standby loan. According to Pynzenyk, the second tranche could be received in two-three months. Pynzenyk said the government, at the IMF’s urging, would keep the state budget deficit at 1% of GDP this year, which is consistent with our long-held forecast; the IMF has required Ukraine to run a balanced budget next year. In related news yesterday, Prime Minister Yulia Tymoshenko said that a portion of the IMF loan could be used to provide assistance to key sectors of the Ukrainian economy, other than banks, such as companies in the metals & mining industry.