Ukraine in talks to increase reserves through currency swap

Ukraine is negotiating with some countries on currency swap arrangements to satisfy its surging financing need caused by the economic crisis, an International Monetary Fund (IMF) official said on Tuesday.

"There are swaps from two or possibly three other countries that are under discussion which could also help augment Ukraine's (foreign exchange) reserves," David Lipton, IMF first deputy managing director, said at an event at the Peterson Institute in Washington D.C.

He said China has recently activated the swap arrangements of 15 billion RMB, roughly 2.4 billion U.S. dollars, which were signed by the central banks of China and Ukraine in 2012.

China's action is likely to extend Ukraine's foreign exchange reserves to cover "three months of imports by June" from "roughly a month of imports," said Lipton.

"If the reserves can be boosted more quickly through these swaps, I think it does provide a measure of safety protection," said Lipton.

Ukraine plunged into its worst economic recession in decades last year, and will need financing of about 40 billion dollars over the next four years, according to the estimation of the IMF.

In early March, the IMF approved a loan program worth 17.5 billion dollars for Ukraine to help the eastern European country stabilize its economy. Endi