Agreement with IMF would be signal to foreign investors about seriousness of authorities intentions - EBA

A new Stand-By Arrangement with the International Monetary Fund (IMF) in the conditions of suspending preparations for signing the association agreement and the agreement on a free trade area (FTA) with the European Union would be a signal to foreign investors about the seriousness of the reformist intentions of state authorities and reduce fears of a default, the European Business Association (EBA) considers.

"The government's decision in late November to suspend preparations for signing the Association Agreement and the FTA agreement with the EU led to the still ongoing political crisis, which can exacerbate the existing financial and economic problems in Ukraine. To prevent the situation's getting out of control and a possible financial collapse, the authorities should take decisive steps to restore confidence. In this context, the signing of a new loan agreement with the IMF would give a clear signal to foreign investors about the seriousness of the reformist intentions of Ukrainian authorities, would reduce fears of a default and provide the government and domestic corporations with access to cheaper external financing," reads a statement by the EBA, which has been sent to Interfax-Ukraine.

In addition, the EBA noted that "the signing of the agreement with the EU would serve as an additional assurance to investors that Ukrainian authorities are determined to reform the economy through ensuring the rule of law, improving governance and creating a more favorable business climate."