LOS ANGELES, Dec 23 (Reuters) - The International Monetary Fund has rejected Ukraine's request for a $2 billion loan to help the recession-strapped country meet financial obligations by year's end, a senior Ukrainian official told the Financial Times on Wednesday.
In refusing to extend additional funds, the IMF cited the Ukraine government's failure to abide by its financial and economic obligations and infighting among the former Soviet state's political leaders, the Financial Times reported.
IMF officials could not be reached for comment late on Wednesday.
Ukrainian officials told the FT the government has other options to bring in the funds to pay natural gas import bills to Russia's Gazprom, and state employees' pensions and wages.
Kiev had expected to receive about $3.8 billion in a fourth tranche of IMF credit by the New Year under a $16.4 billion bailout plan. It has already drawn $10.5 billion under the program.
The IMF is withholding disbursement of the fourth tranche until Ukraine's political leaders begin working together to solve the country's financial problems amid a 15 percent drop in gross domestic product.
The situation is complicated by the upcoming January 17 presidential election which has President Viktor Yushchenko, Prime Minister Yulia Tymoshenko and ex-premier Viktor Yanukovich all competing for the office. A second round run-off, if necessary, will be held in February.
Alexander Ginzburg, an advisor to Tymoshenko, told the FT that the IMF could loosen cash reserve minimums for Kiev's central bank to allow the transfer to government accounts of billions of dollars in reserves built up with IMF money this year.
Yushchenko has vowed, however, to block such a move, the FT reported
