The International Monetary Fund (IMF) on Wednesday approved a new loan program worth of 17.5 billion U.S. dollars for Ukraine, in a bid to help the eastern European country stabilize its economy, IMF Managing Director Christine Lagarde announced in Berlin.

The loan would last for four years and support "immediate economic stabilization in Ukraine and a set of deep and wide-ranging policy reforms aimed at restoring robust growth over the medium term and improving living standards for the Ukrainian people", said Lagarde in a statement.

In exchange to the fund which is essential for saving its economy from collapsing, Ukraine has promised to cut government spending and implement a series of structural reforms in energy, financial, banking and administrative sectors within the next four years.

"The program is ambitious and involves risks, notably those stemming from the conflict in the east of the country," Lagarde said, adding that "with continued firm implementation, there is reasonably strong prospect of success."

Earlier on Wednesday, Ukrainian President Petro Poroshenko said his country needs at least 40 billion U.S. dollars of international aid to shore up its finance amid economic crisis, and an approval of loan from IMF would pave the way for broader international financial assistance.

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