Azarov says government strikes compromise with IMF on loan commitments

Ukrainian Prime Minister Mykola Azarov said yesterday the government reached a compromise with the International Monetary Fund on key points of Ukraine’s 2.5-year USD 25.3 bln stand-by agreement, according to Interfax. They major stumbling blocks are believed to be Ukraine’s commitment to raise gas tariffs for households and utilities by another 50% as of April 15 (following a 50% hike in August 2010) and the pace and substance of Ukraine’s pension reform. Azarov told journalists yesterday that the compromises included a staggered increase in gas prices, but did not provide further details. Local news outlets reported yesterday that the IMF mission, which was scheduled to be in Ukraine from February 1-11, had extended its visit to continue negotiations. The IMF green lit disbursal of a second USD 1.5 bln tranche in December 2010, which brought total disbursements under the program to USD 3.4 bln. According to the original schedule, the next USD 1.5 bln tranche is to be disbursed on March 15, 2011 (the whole amount is to go to the central bank).