The head of an International Monetary Fund team visiting Ukraine gave a positive assessment of progress by the Kiev government on reform on Sunday and said there would be further discussion to finalise a staff-level agreement for approval by the Fund's board.

Ukraine, which is nearly bankrupt and is fighting a war in its east against Russian-backed separatists, is expecting the IMF to disburse a second tranche of credit of about $US2.5 billion under a $US17.5 billion bailout programme.

In a statement issued by the Fund, IMF mission chief Nikolay Gueorguiev said "understandings" had been reached with the authorities on most issues during the team's May 12-29 visit to Ukraine.

Ukrainian President Petro Poroshenko (L) and governor of Odessa region Mikheil Saakashvili talk to locals near the regional state administration in Odessa, Ukraine, May 30, 2015. Reuters

He said "good implementation" of the reform programme had been achieved by Kiev despite the unresolved conflict in the east and the IMF missions saw signs emerging that "economic stability is gradually taking hold".

"Understandings were reached on most issues and discussions will continue in the coming days to finalize a staff-level agreement that can be taken for approval to the IMF management and the Executive Board," Gueorguiev said.

Reuters