To bolster Ukraine economy, which has shaken enough due to global financial turmoil, The International Monetary Fund (IMF) has approved a $ 16.4bn loan.

IMF announced that $4.5bn would be immediately available as part of the two-year package.

Banking recapitalization, fiscal and incomes policy adjustments, and monetary and exchange rate policy shifts have been included in that plan.

The IMF has also agreed to provide loans to several nations to make them out of economic woes, as Iceland and Hungary have reached agreement with the IMF on loan deals.

According to IMF forecast, Ukraine may fall into recession next year, as its economic output has shrunk by 3%.

IMF deputy managing director Murilo Portugal says: “There is a considerable stress on the Ukrainian economy and especially its banking system is passing through a critical phase.”

“We are hopeful that government and the IMF loan will definitely help to restore financial and macroeconomic stability.” He added.

This loan for Ukraine was agreed at the end of October and it has been fully approved now.

There was a considerable growth in Ukraine’s capital Kiev, and it was mainly due to increasing access to credit and a property boom. But after recent financial turmoil and uncertainty, investors have withdrawn funds.

Ukraine heavily depends on commodities, but there prices have also fallen recently.

“There is a substantial deterioration in Ukraine’s current account outlook, and it’s because of falling prices major export i.e. steel.” Portugal said.