"The program with Ukraine is a very ambitious one and is not without risks," Lagarde told CNBC in Brussels.
The IMF announced a funding package—including contributions from the European Union—for Ukraine worth around $40 billion Thursday. Around $17.5 billion of that aid will come from the IMF, Lagarde said, and the financing package will be spread over a four-year period.
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The country is struggling as a result of ongoing conflict with pro-Russian separatists in the east; its currency, the hryvnia, has fallen over 100 percent against the dollar in the last six months.
Lagarde told CNBC that Ukraine had demonstrated that it had an "appetite for economic reform," having made progress on fiscal policy, energy prices and in acting against corruption.
She added that although there were risks to the aid program, it was designed in such a way that there were "buffers to accommodate a difficult situation"—such as the conflict with Russia.
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Timothy Ash, head of emerging markets research at Standard Bank, said in an email that the aid was designed to send a message to Putin and was "a reflection of Western backing for Ukraine."
"The reality is that the West has been so slow with its support," Ash wrote.
—CNBC's Julia Chatterley conducted the interview with Christine Lagarde and Reuters contributed to this report.