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UPDATE 1-Ukraine's Yanukovich says to work with IMF-Ifax

Published 01/19/2010, 10:01 AM
Updated 01/19/2010, 10:06 AM

(Adds comments from deputy PM)

KIEV, Jan 19 (Reuters) - Ukraine's presidential frontrunner Viktor Yanukovich said on Tuesday he would continue work with the International Monetary Fund if he was elected, Interfax Ukraine cited him as saying in western Ukraine.

The IMF suspended its $16.4 billion programme at the end of last year after parliament and President Viktor Yushchenko decided to raise the minimum wage and state pensions -- breaking a promise to keep state finances under control.

Analysts and observers have said it would be difficult for Ukraine to survive without the funds which have supported the state finances, helped in paying for monthly Russian gas bills and are also used by the central bank to prop up the currency.

"We will of course continue cooperation with the International Monetary Fund. But this will always be done in a transparent way so that the whole of the Ukrainian nation knows under which conditions we are taking loans," Yanukovich said.

Yanukovich, opposition leader and former prime minister, has previously criticised the way the government of Prime Minister Yulia Tymoshenko -- also a contender in a Feb. 7 presidential election -- has fulfilled the programme's conditions. His supporters have said they want to introduce changes to the programme with the IMF, without specifying what they were.

Deputy Prime Minister Hryhory Nemyrya told journalists that renewing the IMF programme was key if Kiev wanted take advantage of an EU macroeconomic loan of up to $500 million. He said a technical mission from the IMF would arrive to Ukraine "soon".

"As for the completion of the third review of the programme -- as (IMF chief) Dominique Strauss-Kahn recently said, this will happen right after the election," he told journalists.

"In order not to waste time and complete the third review quickly, a technical mission will come soon," he said.

He said the IMF's relaxation of its floor for central bank foreign currency reserves by $2 billion at the end of last year will ensure that Ukraine pays for Russian gas on time.

The price for Russian gas this quarter has risen to just over $300 per 1,000 cubic metres from a little over $200 in the last three months of 2009.

Delayed payments for gas bills and disputes between Kiev and Moscow over prices have led to supply cuts to Europe before. (Reporting by Sabina Zawadzki and Natalya Zinets; Editing by Andy Bruce)

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