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Barroso suggests EU’s increased financial aid for Ukraine

August 30, 2014, 20:12 UTC+3 BRUSSELS
“More than half a billion euros in loans and 250 million euros in grants have already been mobilized by the European Commission as part of this package,” the president of the European Commission said
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© AP Photo/Yves Logghe

BRUSSELS, August 30, /ITAR-TASS/. European Commission President Jose Manuel Barroso said on Saturday following his talks with Ukrainian President Petro Poroshenko in Brussels that the European Union was ready to increase financial aid for conflict-hit Ukraine.

“More than half a billion euros in loans and 250 million euros in grants have already been mobilized by the European Commission as part of this package,” the president of the European Commission said.

“Over one billion more (in loans) could be released in the coming months and we are ready to consider further financial assistance should additional needs be identified by the IMF during its next review mission,” Barroso said after the talks with the Ukrainian leader.

Poroshenko on Saturday addressed a summit of the European People's Party in Brussels. The Ukrainian leader came to Belgium upon an invitation extended earlier by President of the European Council Herman Van Rompuy.

Kiev is pinning hope on a new loan tranche from the International Monetary Fund to stabilize the country’s foreign exchange market.

The IMF Executive Board approved in late April a two-year stand-by loan facility for Ukraine worth a total of $17.01 billion to prop up Ukraine’s flagging economy. Ukraine received the first $3.19 billion tranche in early May 2014.

On Thursday, the Ukrainian government has instructed the Finance Ministry to sell $340 million to Ukraine’s central bank to replenish its foreign exchange reserves and prop up the rapidly depreciating national currency,

The Ukrainian hryvnia has been depreciating rapidly lately amid a further contraction in the county’s GDP and the continued armed standoff between east Ukraine self-defense militias and the pro-Kiev troops in the Donetsk and Luhansk regions.

The National Bank of Ukraine lowered the hryvnia official exchange rate by 1.68% against the US dollar on August 27 to a new record low of 13.89 hryvnias per US dollar.

Ukrainian Prime Minister Arseny Yatsenyuk earlier said the Ukrainian economy would not be able to function normally at an exchange rate of over 12 hryvnias per US dollar. The Ukrainian currency is currently trading at a rate of 16 hryvnias per US dollar on the black market.

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