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U.S. to offer Ukraine $1 billion in credit guarantees

Staff writer |
Washington has agreed to provide Kiev with $1 billion of credit guarantees this year to help the country tide over the economic crisis.

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Ukrainian Finance Minister Natalia Jaresko and visiting U.S. Treasury Secretary Jacob Lew signed a declaration of intent.

"The U.S. government has agreed to provide Ukraine with 1 billion dollars in the first half of 2015 on condition of staying on the path of reforms," Lew told reporters after the signing ceremony.

Lew explained that the fund would assist Ukraine in solving social issues, namely enhancing protection of the most vulnerable social groups.

He added that the U.S. Treasury would ask Congress to provide another 1 billion dollars this year if Kiev meets the condition of its 17-billion-dollar loan program with the International Monetary Fund.

In 2014, the U.S. government provided Ukraine with 1 billion dollars in loan guarantees and 340 million dollars of financial aid to help the East European economy stay afloat amid its worst financial crisis in decades.

Ukraine's foreign exchange reserves dropped to 7.53 billion dollars in 2014, the lowest level in 11 years. In 2015, the country needs to repay about 11 billion dollars of its outstanding external debt.

The country's budget deficit is expected to reach 3.7 percent of the gross domestic product this year, while inflation is projected to be 13 percent.

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