April 11, 2014 / 12:47 AM / 4 years ago

UPDATE 1-Ukraine says fulfilled all conditions for first IMF tranche

(Adds further comments, background)

By Lidia Kelly and Anna Yukhananov

WASHINGTON, April 10 (Reuters) - Ukraine Finance Minister Oleksander Shlapak said on Thursday that Kiev has fulfilled all conditions to receive the first portion of the financial aid package from the International Monetary Fund.

“We’re here to speak in more specific terms about time and conditions of (international) support,” Shlapak told journalists on the sidelines of the World Bank-IMF spring meeting in Washington.

“Moreover, Ukraine has fulfilled all the conditions set by the IMF for the first tranche.”

The IMF agreed in late March to a $14 billion-$18 billion two-year bailout for Ukraine, a deal to help it recover from months of turmoil that will also unlock further credits making a total of $27 billion.

The Fund’s executive board has yet to approve the distribution of the programme, but Fund Managing Director Christine Lagarde said on Thursday the board is likely to consider it by early May at the latest.

Ukraine’s Shlapak said Kiev had to fulfil 13 IMF conditions in order to receive the money, including ones referring to monetary policy, liquidity requirements, banks’ recapitalisation and a stress test of 35 banks.

“We have met all theses conditions,” National Bank of Ukraine Governor Stepan Kubiv said at the same briefing.

Both Kubiv and Shlapak said that the first tranche of the money will not be used to repay debts to Russia. Moscow claims that Kiev owes it $2.2 billion for supplies of natural gas.

“The money that we will receive will be divided between the reserves of the National Bank and the state budget and this money will be targeted so we don’t plan to spend it on repaying debts to Russia,” Shlapak said. “At least the first portion of the money.”

They also said that the steps taken by the West against Russia over Moscow’s seizure of the Crimea region of Ukraine are not enough. Washington and the European Union have imposed visa bans and asset freezes on a group of Russians and Ukrainians.

“We will ask for sanctions that are related to Russia’s policies and economic actions, because Russia conducts its actions in a non-market manner and it dictates non-market prices,” Kubiv said.

“I think you saw how the Russians are simply laughing because of the sanctions introduced by the United States and Europe,” Shlapak added.

Both Kubiv and Shlapak said that they are disappointed with the statement issued by the Group of 7 largest economies on Thursday, in which the group failed to directly address the conflict between Russia and Ukraine.

“Today, Russia violates laws against Ukraine,” Kubiv said. “Tomorrow it will violate laws against other countries of the Earth.” (Reporting by Lidia Kelly and Anna Yukhananov; Editing by Eric Walsh and Ken Wills)

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