Summary An IMF mission left Ukraine Wednesday without agreeing to resume disbursing a $15.3-billion loan.
KIEV (AFP) - An IMF mission left Ukraine on Wednesday without agreeing to resume disbursing a $15.3-billion loan it extended in 2010 but then froze because of the ex-Soviet country s refusal to pursue reforms.
Kiev now risks having to turn to the bond market to repay $2.4 billion in external debt that comes due this year amid a deepening economic crisis.
The global lender said in a statement that the government had still not done enough to introduce market prices in its natural gas sector or to clean up its murky banking system.
"The key building blocks of a new programme would be measures to reduce Ukraine s fiscal and external current account deficit and energy sector and banking reforms," mission chief Christopher Jarvis said in a statement.
He added that "our dialogue will continue in the coming weeks."
Ukrainian Prime Minister Mykola Azarov promised on Tuesday to visit IMF headquarters in Washington within the coming days.
The International Monetary Fund in 2010 agreed a $15.3-billion credit to the authorities led by President Viktor Yanukovych amid renewed hopes of Ukraine being ready to emerge from its post-Soviet malaise.
But that loan was frozen after the payment of just one tranche of $3.4 billion because the government refused to follow IMF demands such as cutting off gas subsidies that helped Ukraine s industries survive on the global market.
Ukraine s economy has struggled badly in the past year following a brief bounceback that followed the 2008-2009 global economic crisis.
Its external debt for 2013 represents 10 percent of its gold and hard currency reserves, a situation that may force it to turn to the debt markets at a time when Kiev would have to pay heavy interest.
Moscow s VTB Capital investment house noted that "close to zero consumer inflation for the last year, with occasional slippages to well below zero, as was the case last month, indirectly reflects the overall subdued state of the Ukranian economy."
Inflation rates of less than zero boost the value of cash with time and serve as a disincentive for businesses to make investments or for customers to make purchases.
