Ukraine's parliament passes IMF legislation

By: OLGA BONDARUK - AP
By: OLGA BONDARUK - AP

KIEV, Ukraine (AP) — Ukraine's parliament on Friday approved legislation needed for a crucial $16.5 billion International Monetary Fund rescue loan to help the country weather the global financial crisis, which has sent its currency plummeting.

Lawmakers in the Verkhovna Rada voted 243-0 for the bills, which included changes to the country's banking regulations.

Lawmakers from President Viktor Yushchenko's party, and that of his ally-turned-rival, Prime Minister Yulia Tymoshenko backed the measures. Lawmakers from their chief rival's party, Viktor Yanukovych, refused to vote.

The IMF loan was announced on Sunday, but was made contingent on parliament passing banking and other stabilization legislation.

Ukraine has been hard hit by the global financial crisis. The country's banking sector lost over $3.4 billion this month as panicked clients rushed to empty their deposits and convert their savings into foreign currency. The stock market has lost over 70 percent this year.

Earlier Friday, the central bank announced it had won a promise from several top commercial banks to help stabilize the national currency, which has lost over a quarter of its value.

The currency, the hryvna, rose on the efforts, closing at 5.93-5.95 to the dollar on the foreign currency exchange, according to the Inter Business Consulting agency. That was up markedly from its record low of 7.2 on Wednesday. On Thursday, the hryvna recovered to 6.15-6.25.

Serhiy Kruglyk, head of the foreign relations department at the National Bank, told The Associated Press on Friday that several top bankers have promised to refrain from currency speculation and sell currency to retail customers close to the rate at which they buy it.

"The banks supported the idea that they must demonstrate stability of the national currency," he said.

Ukraine is expected to plunge into a recession next year, hit hard by the global financial crisis.

A drastic fall in demand for steel, the engine of the national economy, and investors fleeing emerging markets has left the country starved for foreign currency. Thousands of industry workers across the country are facing layoffs.

Unemployment may rise next year to 7.7 percent from the current 6.2 percent, Labor Minister Lyudmyla Denysova said Friday.


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