Today, the IMF announced a “staff-level agreement” with Ukraine on a $16.5 billion two-year “standby arrangement” to support an economic program that is intended “to help the country meet the balance of payments needs created by the collapse of steel prices, and the global financial turmoil and related difficulties in Ukraine's financial system” and “to support Ukraine's return to economic and financial stability, by addressing financial sector liquidity and solvency problems, by smoothing the adjustment to large external shocks and by reducing inflation. At the same time, it will guard against a deep output decline by insulating household and corporations to the extent possible.”

The Ukrainian financing is still subject to approval by IMF management and the IMF Executive Board, and adoption of “legislative changes to Ukraine’s bank resolution program.” A joint statement by the National Bank of Ukraine and the Ukrainian Ministry of Finance confirmed the IMF announcement and expressed the view that IMF support “will promote an accelerated cooperation between Ukraine and other International financial organizations and bilaterals, strengthen the confidence of private investors and ensure stable operations of the banking system of Ukraine.”

On Friday, the IMF announced a $2.1 billion rescue plan for Iceland. The IMF has reiterated that it has $200 billion of loanable funds, that it can draw up to approximately $53 billion of additional funds under two borrowing arrangements with groups of IMF member countries and that it stands ready to “lend quickly to member countries that need help during the ongoing crisis.”