(Updates with detail, quotes)
PRAGUE, March 25 (Reuters) - Ukraine expects to resume talks with the International Monetary Fund soon and hopes to clinch an agreement on receiving the second tranche of its loan in two to three weeks, President Viktor Yushchenko said on Wednesday.
He said his country would not allow defaults on any of its financial obligations and had taken a major step in stabilising its currency, the hryvnia, by balancing its trade account in the past several months.
"I expect to finalise our agreement in the next two to three weeks," Yushchenko told a conference in Prague. "In the past four months, we have managed to form a clear response to what steps should be taken by Ukraine to sort out the situation."
Ukraine last year clinched a $16.4 billion loan deal with the International Monetary Fund to help offset the effects of the world financial crisis but the Fund has suspended the release of the loan's second tranche while discussions proceed on several issues, including the size of the budget deficit.
Both government officials and the IMF have said that differences have been narrowed, but no date has yet been set for the return of an IMF mission to discuss the disbursement of the second tranche, valued at about $1.84 billion.
Yushchenko said the IMF deal as well as Kiev's own measures should help stabilise the country's foreign currency reserves at a healthy level.
Yushchenko said public finances were stable and there was no danger of being caught unable to pay its debts.
"I'm sure Ukraine will not allow any default on any of its obligations, government or corporate," Yushchenko said.
He said one of the key achievements of the past several months was to eliminate the trade deficit, which ballooned after Ukraine's export markets, particularly for metal products, chemicals and machinery, imploded amid the global crisis.
"We have a healthy trade balance and we have eliminated one of the destabilising factors in the economy," Yushchenko said. (Reporting by Balazs Koranyi, editing by Mike Peacock)