At G20 meeting, Yellen steps up calls for increased economic aid to Ukraine

By David Lawder

BENGALURU, Feb 23 (Reuters) – U.S. Treasury Secretary Janet Yellen stepped up calls on Thursday for increased financing support to Ukraine to help it battle the year-old Russian invasion as the United States readies an additional $10 billion in economic assistance in coming weeks.

Yellen, speaking in remarks prepared for delivery to a news conference as G20 finance leaders gathered on the outskirts of the Indian technology hub of Bengaluru, said it was critical for the International Monetary Fund to “move swiftly” towards a fully financed loan programme for Ukraine.

“As President Biden has said, we will stand with Ukraine in its fight – for as long as it takes,” she said. “Continued, robust support for Ukraine will be a major topic of discussion during my time here in India.”

Ukraine is seeking a $15 billion multi-year IMF programme, Prime Minister Denys Shmyhal said on Monday after meeting IMF Managing Director Kristalina Georgieva in Kyiv.

Yellen said that previous U.S. military, economic and humanitarian aid totalling $46 billion has allowed Ukraine to preserve economic and financial stability under “extraordinary circumstances.”

“Our economic assistance is making Ukraine’s resistance possible by supporting the home front: funding critical public services and helping keep the government running. In the coming months, we expect to provide around $10 billion in additional economic support for Ukraine.”

The U.S. aid was approved by Congress in December as part of a broad government funding bill that included a new $45 billion package of emergency military and other assistance to the war-torn country.

MITIGATING SPILLOVERS

Yellen in her remarks said the global economy “is in a better place today than many predicted just a few months ago,” with concerns fading that the Ukraine war’ spillovers would cause growth to slow sharply.

She said while headline inflation was beginning to ease in the United States and across the globe, it was important for G20 finance officials to keep working to quell inflation, adding: “We are not out of the woods yet.”

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She said price caps imposed by Western countries on Russian crude oil exports and petroleum products were helping to stabilize global energy prices while reducing Russia’s energy revenues “substantially.”

“Last month, the Kremlin’s oil revenue was nearly 60 percent lower than in the immediate aftermath of the invasion,” she said, adding that it was enabling emerging markets, including India, to negotiate steep discounts on Russian oil.

Yellen said that G20 countries need to work to ease the debt overhang that is putting more than half of low-income countries in debt distress.

“I will continue to push for all bilateral official creditors, including China, to participate in meaningful debt treatments for developing countries and emerging markets in distress,” she said, adding that debt treatment for Zambia and financing assurances for Sri Lanka were “most urgent”

The G20 meetings also will be a key venue for working to advance reforms to the World Bank and other multilateral development banks to expand their lending to fight climate change, pandemics and other global challenges, she said.

She commended departing World Bank President David Malpass, saying that the bank under his leadership has “measurably improved the lives of people around the world.” (Reporting by David Lawder; Editing by Raju Gopalakrishnan)