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Ukraine Wins New I.M.F. Support as Tensions Rise With Russia

Ukraine Wins New I.M.F. Support as Tensions Rise With Russia

MOSCOW : Ukraine won a new lending commitment from the International Monetary Fund on Tuesday, a lifeline from the West for a country whose economy has been sapped by corruption and war with Russian-backed separatists.

The new loan is a boon for President Petro O. Poroshenko ahead of a presidential election scheduled for March. He announced the decision on his Facebook page and the I.M.F. described the program in a statement.

Without the new support, it was unclear how the government would pay internal and external debt and finance a budget deficit, as the I.M.F. had suspended an earlier bailout over worries about corruption. A year after Mr. Poroshenko’s pro-Western government came to power in 2014, the I.M.F. agreed to loan Ukraine $17.5 billion over four years — and then suspended the aid in 2017 after disbursing half.

Before the new loan was announced, Ukraine had seemed headed toward default with $11 billion in debt coming due within two years.

The I.M.F. Executive Board decided to open a new line of credit worth $3.9 billion, aid that could help prop up Ukraine as it goes on a war footing. Tensions with Russia have recently ratcheted up, especially after Russian ships opened fire on and seized three Ukrainian naval vessels late last month.

The I.M.F. has been demanding that Ukraine create an independent anticorruption court to crack down on the theft of budget money — which partly consists of Western aid — by government insiders. It is also urging the government to raise natural gas prices.

The government has said an anticorruption court will be up and running next year.

For decades, natural gas subsidies had left Ukraine vulnerable to Russian meddling, as the gas companies whose pipelines enter Ukraine from Russia and the Kremlin had insisted on dealing through middlemen. Some of those middlemen used their profits to finance a political party loyal to Moscow.

A genuine market for gas, if it develops, is seen as a long-term solution for providing stability to Ukraine’s economy, either by stimulating companies to tap the country’s own large gas reserves or by importing from a diverse group of suppliers — rather than relying on a country Ukraine now considers its enemy.

The government had resisted raising prices before an election, but agreed in October to increase them by 23 percent. Although the government had pursued the natural gas subsidies, Ukraine’s prime minister, Volodymyr Groysman, said they had hurt the country.