Michael Camdessus, Managing Director of the International Monetary Fund, said today he had received a request from the Ukranian authorities for a 12-month stand-by arrangement for SDR 997.3 million (about US$1,492 million) in support of their adjustment and reform program. The authorities also indicated their intention to request a second drawing of SDR 249.3 million (about US$373 million) under the IMF's Systematic Transformation Facility (STF). Together the two credits being requested will amount to about US$1.8 billion, or the equivalent of 125 percent of Ukraine's quota in the IMF. The authorities' program is set forth in a Memorandum of Policies that is being submitted to the IMF's Executive Board, which is expected to consider the two credit requests in a few weeks' time.

The program that the Ukrainian authorities have designed has three strategic objectives: to bring inflation down quickly through a major reduction in the budget deficit; to strengthen the performance of exports, in particular by removing administrative regulations; and to lay the foundations for a recovery in economic activity by pressing ahead with market-oriented economic reforms. "It is a comprehensive, strong and courageous program," Camdessus said. "If implemented rigorously, it will constitute a decisive break with the past that Ukraine sorely needs and that the international community will surely welcome."

Camdessus called upon Ukraine's partners to provide financial support on appropriate terms to close a large balance of payments gap. "Such support," he remarked, "is warranted by the strength of the adjustment policies to which the Government of Ukraine is committing itself, and is also essential to the very coherence of the program." Camdessus expressed confidence that international support on the needed scale would be forthcoming and that the IMF's Executive Board would approve Ukraine's request for assistance from the Fund.