Ukraine says IMF cooperation 'absolute priority'

Ukraine's government said Friday cooperation with the International Monetary Fund was an "absolute priority" as it sought to allay fears of a possible breakdown in ties with the lender after a government reshuffle.

Ukrainian President Volodymyr Zelensky, who analysts say has been unhappy with the government's handling of the economy and his own flagging popularity, this week ousted Oleksiy Goncharuk as prime minister and changed his key ministers.

As part of the reshuffle, respected finance minister Oksana Markarova left government, sparking concern over the fate of the ex-Soviet country's further cooperation with its Western donors.

"The government will continue a balanced fiscal policy and constructive cooperation with the IMF and other Ukraine creditors," newly-installed Prime Minister Denys Shmygal said in a statement.

On Friday, Markarova's replacement, Igor Umansky, conducted talks with Goesta Ljungman, the IMF representative in Ukraine, in what was his first official engagement at the new post, the ministry said.

Umansky said that cooperation with the IMF was "an absolute priority" for Ukraine, adding that the lender's financing was important for maintaining the country's financial stability and implementing reforms.

Umansky was the first deputy head of the finance ministry under Prime Minister Yulia Tymoshenko a decade ago.

Ukraine's economy has been hit hard by the conflict with Russian-backed separatists in the east and is reliant on foreign aid.

Ukraine and the IMF agreed a new USD 5.5-billion loan programme in December, but the lender has yet to approve the deal.

Andy Hunder, president of the American Chamber of Commerce in Ukraine, this week questioned the timing of a cabinet reshuffle, adding that investors would be watching for the IMF's next move.

"The timing is actually quite bad in terms of market uncertainty, with the coronavirus outbreak and global market downturns," Hunder told AFP.

He praised the new prime minister as "cool-headed" and "prudent", but said all eyes were now on the new finance minister.