Ukraine Seeks IMF's Help to Weather Financial Crisis

MOSCOW, Oct. 17 -- Ukraine's feuding president and prime minister sought help from the International Monetary Fund in separate meetings Friday as a political dispute between them complicated talks for a multibillion-dollar loan to stabilize the country's struggling financial system.

The global financial crisis has battered Ukraine, with the former Soviet republic's stock market plunging and its currency falling sharply. The government imposed limits on withdrawals Tuesday to stop a run on banks that drained more than $1 billion from deposits, and it has been forced to rescue two big banks from insolvency.

Ukraine's top leaders are seeking an IMF loan to shore up the financial system, but a bitter split in the democratic coalition that came to power in the 2004 Orange Revolution has cast a shadow over negotiations to obtain the funds.

President Viktor Yushchenko dissolved parliament last week and called for early elections in December, but his former ally, Prime Minister Yulia Tymoshenko, is fighting the decision in court, arguing that it would be reckless to spend $80 million on a parliamentary vote during the economic crisis.

At a news conference Thursday, Tymoshenko said she believed that the IMF was prepared to lend the country $3 billion to $14 billion to see it through the crisis but only if the president postponed the elections.

"It is very difficult for them to hold negotiations of this kind with Ukraine while one hears all these proposals for early parliamentary elections," she said, according to the Interfax news agency.

After meeting with IMF officials Friday, Tymoshenko said in a statement that her government was "extremely interested" in working out a deal for the rescue package, noting the challenges posed to Ukraine by the falling price of steel, the country's main export. But she emphasized the economy was fundamentally sound and still growing fast.

Yushchenko also sought to calm investor fears after meeting with the IMF. "The situation on the domestic and international markets is not easy, but I am an absolute optimist and sure that we will be able to present a proper response," he said, according to a statement from the presidential office.

But as IMF talks were underway, Fitch Ratings downgraded Ukraine's long-term credit ratings, arguing that the risk of serious damage to Ukraine's economy was rising. Standard & Poor's put Ukraine's credit rating on review earlier in the week.