Ukraine should tackle corruption to win new loan: IMF

President of Ukraine Volodymyr Zelensky visits an exposition at the Latvian Museum of Occupation in Riga, Latvia in October 2019

Talks with Ukraine on a new loan package are continuing but Kiev will need to address corruption and reduce the power of oligarchs to attract much needed investment, an IMF spokesman said Thursday.

Some structural reforms will be "of critical importance" to securing a new loan deal, including "strengthening the rule of law and tackling corruption," IMF spokesman Gerry Rice told reporters.

The country is in the spotlight due to the impeachment proceedings against US President Donald Trump, in which the US president stands accused of abusing his office by withholding military aid to coerce Kiev into launching investigations that could help him politically.

The White House maintains the call was simply an effort to pressure the new government of Ukraine to rein in corruption.

The IMF has repeatedly pointed to "pervasive corruption" as a factor holding back economic growth in the country.

"To attract much needed investment we think that Ukraine needs to advance some structural reforms, again, notably to improve governance, and tackle corruption and to reduce the role of the state and oligarchs while continuing sound fiscal and monetary policies to obtain macroeconomic stability," Rice told reporters.

He said there has been progress in the talks over a new loan, including on fiscal and monetary policies and the need to ensure independence of the central bank.

However, "it's not unusual that it takes time to agree on the package of policies that could be supported by the IMF program."

The IMF has not released any funds to the country since a $1.4 billion tranche in December 2018.

In early August, Ukraine announced plans to request fresh IMF support of $5 billion to $10 billion.

President of Ukraine Volodymyr Zelensky visits an exposition at the Latvian Museum of Occupation in Riga, Latvia in October 2019