The International Monetary Fund said today it had agreed a $14-18 billion bailout for Ukraine, a deal that will unlock further credits to reach a total of $27 billion over the next two years.

The agreement is intended to help Ukraine meet debt payments looming this year after months of anti-government protests which resulted in the overthrow of president Viktor Yanukovich and a standoff with Moscow in which Russia annexed the Crimea region.

“The mission has reached a staff-level agreement with the authorities of Ukraine on an economic reform programme that can be supported by a two-year Stand-By Arrangement (SBA) with the IMF,” the IMF said in a statement.

The International Monetary Fund will deliver an assessment to Ukraine today on its bailout request. Photo: BloombergIMF to give assessment on Ukraine bailout request
Ukrainian policemen stand guard at the Regional administration building in DonetsK. Photograph: EPAEU ‘ready to provide’ €11 billion in financial aid to Ukraine
Christine Lagarde said a team would go to Kiev to carry out an independent assessment of the economic situation in Ukraine in the coming days. Photograph: Ian Waldie/BloombergUkraine requests financial support from IMF

“The financial support from the broader international community that the programme will unlock amounts to $27 billion over the next two years. Of this, assistance from the IMF will range between $14-18 billion, with the precise amount to be determined once all bilateral and multilateral support is accounted for.”

The agreement is subject to approval by IMF management and the executive board, which will consider it in April.

“Following the intense economic and political turbulence of recent months,

Ukraine has achieved some stability, but faces difficult challenges,” the IMF statement said.

Announcing the agreement in the Ukrainian capital, Kiev, IMF mission chief Nikolay Gueorguiev declined to say how big the initial tranche of aid would be. Kiev has said it desperately needs cash to cover expenses and avert a possible debt default.

The country’s finance minister has predicted the economy will contract 3 per cent this year, weakened by years of mismanagement and political turmoil. The bailout from the IMF will help prop up Ukraine’s economy and clear the way for several billion dollars in aid from the United States, European Union, Japan and other nations.

Ukraine’s new leaders yesterday announced a radical 50 per cent increase in the price of domestic gas from May 1st, meeting an unpopular condition for IMF aid that Mr Yanukovich had refused before he was ousted last month.