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IMF satisfied with cooperation with Ukraine, despite slight gap in SBA program
18 November 2010
Ukraine could receive a second tranche from the International Monetary Fund (IMF) by late 2010 under the Stand-By Arrangement (SBA), IMF Resident Representative in Ukraine Max Alier said at the Ukrainian Banking Forum annual conference, held by the Adam Smith Institute in Kyiv on Tuesday.

"We have a slight gap in some indicators, nevertheless the results of the work on the SBA are rather good," he said.

"The government is observing its liabilities to bring order to the fiscal situation… Fiscal policy should be aimed at cutting borrowing in the medium term," he added.

Alier said that in 2011 the government would maintain social spending, although it would expand capital expenditure, in particular, in regard with the preparations for the Euro 2012 European football championship.

Alier also said that the reforms planned would support fiscal consolidation, and Naftogaz Ukrainy's budget in 2011 would be balanced, while a 1% deficit is expected in the company's budget this year. In addition, he said that the monetary policy in Ukraine is more and more focusing on ensuring a stable inflation level.

"Next year inflation will fall," he said.

He said that authorities are making efforts to form a forward currency market.

"This would allow the more efficient hedging of risks," he said.

Commenting on the Ukrainian banking system, the financier said that its capitalization level is adequate.

"The banking system is rather liquid and adequately capitalized," he said.

Alier added that it was important to conduct reforms in the banking laws to settle problems with the rights of creditors.

Source: Interfax-Ukraine

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