Ukraine

Ukraine’s hryvnia plunged 17 percent in two days to a record low against the dollar as a pledge by President Viktor Yushchenko to support the currency failed to ease concern that most of the country’s loans risk default, Bloomberg reported. The currency fell 7 percent today, reaching 9.65 per dollar at 2:30 p.m. in Kiev, adding to a 44 percent drop this year. It continued to slide after Yushchenko said Ukraine will buy hryvnia and called for licenses to be revoked for lenders found speculating against the currency.

Ukrainian lawmakers on Thursday backed severe restrictions on public spending and a government-wide hiring freeze to help the economy survive the global financial turmoil, the Associated Press reported. As the Ukrainian currency hit a new low, parliament gave tentative approval to legislation that would limit spending on renovating government buildings, purchases of automobiles and other public expenses. The law would be the latest in a series of measures to battle the crisis.

Icelanders will take to the streets in the thousands tomorrow to protest the government's failure to clinch a $6 billion International Monetary Fund-led loan while countries in less dire economic straits jump the IMF queue, Bloomberg reported today. Weekly protests in downtown Reykjavik may swell to 20,000 soon, or 6 percent of the population, said Andres Magnusson, chief executive of the Icelandic Federation of Trade and Services. The Atlantic island, which had the fifth-highest per capita income in the world last year, needs the money to finance imports and revive the banking system.

Japan will offer up to 10 trillion yen ($105 billion) to the International Monetary Fund to bailout nations reeling from the global financial crisis, The Nikkei newspaper reported Thursday. Japanese officials have repeatedly said Tokyo is ready to provide some of its ample cash for IMF loans if the multilateral group doesn't have enough funds for bailouts. But the ministers have not given an amount. The Nikkei, the nation's top business daily, said the amount is likely to be about 10 percent of Japan's $1 trillion foreign currency reserves.

The International Monetary Fund has “record levels of liquidity” to combat the global economic crisis and debate over new ways of supplementing its coffers was not “today’s problem”, according to John Lipsky, IMF first deputy director. With the Fund facing unprecedented calls on its resources, some policymakers have raised concerns about its continued capacity to react to demands such as its $16.5 billion loan to Ukraine and $2 billion loan to Iceland, the Financial Times reported yesterday.

The International Monetary Fund on Wednesday approved a $16.5 billion loan program for Ukraine that includes monetary and exchange rate policy shifts to ease strains from the global financial crisis, Reuters reported yesterday. The IMF said it would immediately disburse $4.5 billion to the government under the two-year loan agreement.