The International Monetary Fund (IMF) has reached a staff-level agreement with the Ukrainian leadership on opening a two-year credit worth from $14 billion to $18 billion, the IMF said in a press release.

"The agreement reached with the authorities is subject to approval by IMF Management and the Executive Board. Consideration by the Executive Board is expected in April, following the authorities' adoption of a strong and comprehensive package of prior actions aiming to stabilize the economy and create conditions for sustained growth," IMF Mission Chief for Ukraine Nikolay Gueorguiev said in a statement on Thursday.

He said that the IMF's program could be part of broader international financial assistance to Ukraine in the amount of up 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," reads the statement.

The IMF mission said that following the intense economic and political turbulence of recent months, Ukraine has achieved some stability, but faces difficult challenges. In particular, to safeguard reserves and address currency overvaluation, the National Bank of Ukraine (NBU) floated the exchange rate in February.

"Measures implemented in February and March helped stabilize financial markets and ensured that critical budget payments have been met. Nonetheless, the economic outlook remains difficult, with the economy falling back into recession. With no market access at present, large foreign debt repayments loom in 2014-15," the IMF said.

The document states that the goal of the authorities' economic reform program is to restore macroeconomic stability and put the country on the path of sound governance and sustainable economic growth while protecting the vulnerable in the society.

"The program will focus on reforms in the following key areas: monetary and exchange rate policies; the financial sector; fiscal policies; the energy sector; and governance, transparency, and the business climate," reads the statement.

In particular, monetary policy will target domestic price stability while maintaining a flexible exchange rate. This will help eliminate external imbalances, improve competitiveness, support exports and growth, and facilitate the gradual rebuilding of international reserves.

"The NBU plans to introduce an inflation targeting framework over the next twelve months to firmly anchor inflation expectations," reads the document.

Financial sector reforms will focus on: ensuring that banks are sound, liquid, and well-capitalized; upgrading the regulatory and supervisory framework of the NBU, including complying with international best practice and supervision on a consolidated basis, and facilitating resolution of non-performing loans in the banking sector.

According to the statement, fiscal policy will secure priority spending during the coming months and implement deeper fiscal adjustment over the medium-term. The initial stabilization in 2014 will be achieved through a mix of revenue and expenditure measures. For 2015-16, the program envisions a gradual expenditure-led fiscal adjustment - proceeding at a pace commensurate with the speed of economic recovery and protecting the vulnerable - aiming to reduce the fiscal deficit to around 2.5% of GDP by 2016.

Energy sector reforms will focus on reducing this sector’s fiscal drag, while attracting new investment and enhancing efficiency.

"A key step is the commitment to step by step energy reform to move retail gas and heating tariffs to full cost recovery, along with early action towards that goal. Importantly, this will be accompanied by scaled up social protection to mitigate the impact on the most vulnerable," reads the statement.

Over time, the program will focus also on improving the transparency of Naftogaz's accounts and restructuring of the company to reduce its costs and raise efficiency

Reforms to strengthen governance, enhance transparency, and improve the business climate will be central elements of the program. Policy measures in these areas will include adoption of a new procurement law to close loopholes allowing evasion of a competitive procedure; measures to facilitate VAT refunds to businesses; and an independent quarterly audit of the Naftogaz accounts. The above, and other measures, will be fully developed with the assistance of the World Bank, EBRD, and other international financial organizations and will help increase transparency of government operations, address long-standing governance issues, and remove barriers to growth.

Moreover, the IMF will prepare a comprehensive diagnostic study that will cover the anti-corruption and governance framework, the design and implementation of laws and regulations, the effectiveness of the judiciary, and tax administration.

"The authorities' economic reform program is rightly focused on addressing the key economic challenges faced by Ukraine. Its success in achieving these important objectives will be steadfast implementation, which will enable these efforts to be supported by the international community," reads the statement.