After long delay, IMF review agrees new funds for Ukraine

An International Monetary Fund team has agreed to the release of $1.6 billion in fresh funds to Ukraine after a long delay marked by government turmoil and persistent problems with corruption.

The IMF said Wednesday that Ukraine "has made considerable progress in restoring macroeconomic stability" but called the fight against corruption a "litmus test" for the government retaining international support.

But the funds will only be released after a formal approval of the IMF board, expected in July, the Fund said in a statement.

"It is therefore important that the authorities boost their efforts to entrench fiscal and financial stability, decisively enhance transparency and the rule of law, and reform the large and inefficient state-owned enterprise sector," it said.

A staff review of the country's efforts under its $17.5-billion loan program set in March 2015 found Kiev had made enough reform progress to merit the new disbursement.

The newest review was originally slated to be completed in the second half of last year.

The IMF has been frustrated by the slow adoption of painful belt-tightening measures that were resisted by populist parties and helped weaken leaders who rose to power in the wake of Ukraine's February 2014 uprising.

Allegations of top-level corruption led to the resignation in April of prime minister Arseniy Yatsenyuk, who was replaced by Volodymyr Groysman.

So far Ukraine has only received $6.7 billion in disbursements in the three-year loan program. Together with European Union support, the funds are desperately needed to finance the government and stabilize the economy.