AMF, KIEV: The International Monetary Fund will not approve a new $1 billion loan payment for Ukraine yesterday as scheduled, due to "recent developments" in the country, the IMF confirmed.
Ukraine's Finance Ministry on Sunday announced that the approval process for the loan was delayed after Kiev cut trade links with Russian-backed rebel eastern regions.
"The IMF Executive Board meeting on Ukraine scheduled for Monday, March 20 has been postponed to allow staff time to assess the implications of recent developments for the program," the fund said in a statement. "Staff expect to announce a new date soon."
The IMF in early March agreed on the review of the oft-delayed, $17.5 billion loan program first agreed in 2015, but the cash-starved country will have to wait longer to get the next installment, which requires board approval.
The loan has seen delays due to the government's failure to implement reforms, but now has been impacted by last week's decision by the former Soviet nation to halt trade with pro-Moscow insurgents that it has been battling since 2014.
The pro-Western leadership in Kiev took the drastic step after rebels seized dozens of Ukrainian-owned businesses on their territory in response to a trade blockade by nationalist protesters. Kiev also slapped sanctions on the Ukrainian subsidiaries of five Russian banks -- including state-run giants Sberbank and VTB -- in part over Moscow's decision to officially recognize identity documents issued by the rebels.

Ukraine's finance ministry said the IMF delayed the loan disbursement to calculate the economic impact of these measures, but insisted the loan disbursement would get back on track soon.