SNAP ANALYSIS- Ukraine and IMF agree on loan

KIEV (Reuters) - Ukraine agreed a $16.5 billion (10.4 billion pounds) standby loan with the International Monetary Fund (IMF) on Sunday to help shield it from the global financial crisis by bolstering its currency reserves and propping up the banking sector.

WHAT'S THE DEAL?

* The IMF can provide the standby facility, providing Ukraine's parliament passes certain financial measures, including balancing the budget and introducing reforms that would support the banking sector.

* The standby facility is valid for 24 months and Ukraine does not necessarily have to draw on it.

DIFFICULTIES AHEAD?

* Ukraine is in the midst of the latest bout of political turmoil which has gripped the country virtually since President Viktor Yushchenko was swept to power by mass "Orange Revolution" protests. The ex-Soviet state now faces its third parliamentary election in as many years.

* Yushchenko dissolved parliament this month after the collapse of a coalition of two groups in parliament led by him and Prime Minister Yulia Tymoshenko, his ally from the 2004 Revolution, now at odds with him. Tymoshenko opposes the election.

* Yushchenko issued a decree for a December 7 election, but suspended it last week to enable parliament to pass financial legislation that includes the IMF's demands.

* But parliament, which has a long history of fractious behaviour, was blocked last week by Tymoshenko's supporters who oppose any move to link the financial legislation with financing for the election. Parliament is scheduled to sit again on Tuesday and chairman Arseniy Yatsenyuk says failure to pass the packages could imperil the IMF deal.