growing fears about the world’s economic health after securing a $16.5bn (£10.4bn)
emergency loan from the International Monetary Fund yesterday.
( A stockbroker waits nervously in Frankfurt Photo: AP )
The International Monetary fund (IMF) has offered a $16.5bn (£10.4bn) emergency loan to Ukraine and agreed a rescue package with Hungary. It's 24-month loan will be used to ensure stability in the former Soviet state and rebuild confidence among investors. The IMF remains in discussion with Belarus, Hungary and Pakistan.
Ukraine became the second European nation to receive a bail-out after Iceland secured $2.1bn from the IMF last week. Hungary turned to the IMF for help in order to help shore up its falling currency and financial markets and shield the country from the global financial crisis.
The loan - the terms are not yet known - is conditional on Hungary adopting "strong policies" and will be drawn from the IMF, the EU, and some individual European governments, together with regional and other multilateral institutions. Internal political turmoil has delayed economic development in Ukraine and the IMF loan depends on the ex-Soviet state being able to balance its budget and make reforms to its banking sector.
Easy credit and a property boom have seen Ukraine's capital Kiev expand rapidly but the global downturn has seen investors and those willing to offer loans withdraw. Ukraine also relies heavily on steel, but prices have collapsed and its currency, the hryvnia, has fallen sharply in the past two weeks.
The IMF remains in discussion with Belarus and Pakistan. This morning the prime minister of Iceland was reported as saying the island needs $4bn more in funding to help stabilise its ailing economy.
"It's hard to give an exact figure, but the situation would be good if we would get $4bn more," Geir Haarde was quoted as saying in Finland's largest daily Helsingin Sanomat. The deal still needs to be approved by the IMF board and Mr Haarde said on Friday he expected it would take about 10 days for the review to take place.
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