IMF APPROVES $2.2 BILLION LOAN TO UKRAINE. The IMF Board of Directors on 4 September approved a three-year $2.2 billion loan to Ukraine. The first tranche of the loan, worth some $260 million, will be released "within days," Ukrainian News reported on 5 September. The disbursement of the other tranches will depend on Ukraine's compliance with the reform program for 1998-2001 agreed by the IMF and the Ukrainian government. That program aims at increasing state finances and continuing structural reforms as well as tightening fiscal policies to control government spending. The program foresees GDP growth at 4 percent by 2001, compared with -0.3 percent in 1997. Inflation is expected to drop from 10 percent to 7 percent, and hard currency reserves are slated to increase to the equivalent of seven weeks' imports, compared with 6.3 weeks in 1997. JM

UKRAINE INTRODUCES NEW HRYVNYA EXCHANGE CORRIDOR. Following its announcement last week (see "RFE/RL Newsline," 2 September 1998), the Ukrainian government has de facto devalued its currency by introducing a new hryvnya exchange rate corridor. On 5 September, the new exchange rate corridor of 2.5-3.5 hryvni to $1 dollar replaced the previous band of 1.8-2.25 hryvni to $1. A joint statement by the cabinet and the Ukrainian National Bank said the move is aimed at maintaining export-import operations, ensuring the competitiveness of exports on foreign markets, averting capital outflow from Ukraine, and reducing the number of barter operations. The value of the Ukrainian hryvnya has declined almost 30 percent since January 1998, when the currency band was established. The central bank's reserves have dwindled to some $800 million following the bank's unsuccessful attempts to maintain the hryvnya within the previous exchange range. JM