After banks and Iceland, Ukraine goes bankrupt! Hungary, Pakistan and Belarus next.
The International Monetary Fund – IMF has agreed to lend $16.5 billion (in loan) to Ukraine to help it sustain its economy and financial stability, after the international credit crunch rendered the country’s currency and stock markets plunging.
“The authorities’ program is intended 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,” Dominique Strauss Kahn, the Managing Director of IMF said. “At the same time, it will guard against a deep output decline by insulating household and corporations to the extent possible.”
In recent times, Ukraine’s capital city Kiev had seen an expansion boom thanks to availability of loans or mortgages for properties. It was coming up as one of the best markets for international investment. Now, because of credit crunch that originated in the United States, very less or no banks are willing to lend money, resulting in decline of property prices.
Ukraine’s currency Hryvnia has taken a massive dip in the last 2 weeks and because of the country’s reliance on steel and price reductions, Ukraine is now in desperate need of of the 16 and a half billion dollars.
World economy lowdown – Help IMF!
After the recent USA government’s intervention of 700 Billion US dollars to help the American economy led by Neel Kashkari, followed by a 2.1 billion dollars’ loan to Iceland by the International Monetary Fund (IMF) – Pakistan, Hungary and Belarus are on the verge of major economic collapses. All three countries are at advanced stages of talks with the IMF.
Countries least affected are those with least economic interactions with the United States. Except for India and China, there aren’t many.