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WASHINGTON/KIEV, May 8 (Reuters) - The International Monetary Fund approved on Friday the release of $2.8 billion for Ukraine, the second tranche of a $16.4 billion programme that had stalled for several months due to policy differences.
The IMF board waived a number of previously held conditions, allowing authorities to continue with exchange rate restrictions, multiple currency practices and the imposition of import restrictions.
It has allowed for a budget deficit of 4 percent of gross domestic product, against an initial demand for a balanced budget. Differences over the budget deficit first stalled the loan programme in February.
"The authorities' revised economic programme ... seeks to mitigate the effects of the global crisis, restore confidence in the banking system and preserve fiscal sustainability while protecting the most vulnerable segments of the population," said John Lipsky, the IMF's First Deputy Managing Director.
The Fund said the next tranche of its loan programme would be worth about $3 billion and subject to endorsement by the IMF Board after June 15.
"Accordingly, the next disbursement, which will be available after June 15, will be 2.125 billion SDR or about $3 billion," IMF Mission Chief to Ukraine, Ceyla Pazarbasioglu, said during a conference call. (Reporting by Emily Kaiser and Sabina Zawadzki)