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US Treasury announces additional $1.7 bn aid to Ukraine

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The United States Treasury announced Tuesday it will send an additional $1.7 billion in economic aid to Ukraine to help continue funding the country’s “essential services.”

“This latest contribution of economic assistance for Ukraine is part of President Biden’s commitment to support the Government of Ukraine as it defends Ukraine’s democracy against Russia’s unprovoked and unjustifiable war,” Treasury Secretary Janet Yellen said in a statement.

“This aid will help Ukraine’s democratic government provide essential services for the people of Ukraine.”

The payment, part of the $7.5 billion aid package signed by President Joe Biden in May, is set to be made through the World Bank.

The funds will go towards critical operations in Ukraine, such as paying health care worker salaries, according to the Treasury statement.

According to World Bank estimates, the war, which began with Russia’s invasion of its former Soviet neighbour in February, could cause the Ukrainian economy to contract by up to 45 percent in 2022.

The country is currently running a budget deficit that is growing by $5 billion every month, exacerbated by its inability to raise funds or to access financing on external markets.

Allies have rushed to pump Ukraine with aid, with the G7 and the European Union also announcing commitments of $29.6 billion in further money for Kyiv, with $8.5 billion of that coming from the United States, according to the Treasury Department.

Washington already disbursed two payments of $500 million of that amount through the World Bank in April and May to help cover Ukraine’s immediate costs as it fought off Russia’s invasion, as well as a third payment of $1.3 billion in June, the Treasury said.

The final tranche of funds will be transferred by the end of September.

Washington has already supplied Kyiv with more than $6 billion in military equipment since Russia’s invasion.