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IMF urges Ukraine to up gas prices

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May 28, 2012, 11:47 a.m. | Business — by Reuters

Ukraine will have to make significant increases in the price of gas for domestic consumers to get funds flowing again under its suspended International Monetary Fund bailout.
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Reuters

Ukraine will have to make significant increases in the price of gas for domestic consumers to get funds flowing again under its suspended International Monetary Fund bailout, the head of a visiting Fund mission said on Monday. Asked what Ukraine would have to do for the Fund to resume its aid programme, IMF mission chief Christopher Jarvis said: "We recommend significant upfront (gas) tariff increases and regular increases thereafter as part of a time-bound plan to eliminate subsidies."

On the national currency, the hryvnia, Jarvis said: "We continue to believe that greater rate flexibility can better serve Ukraine in adapting to changing economic circumstances and can provide a buffer for external shocks."
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