KIEV (Reuters) - Ukraine has signed a memorandum with the International Monetary Fund that paves the way for the disbursement of the next tranche of loans under its $17.5 billion bailout program, a source in the central bank said on Wednesday.

Disbursements have been delayed repeatedly over the past two years due to stop-start progress on reforms. The latest tranche of $1 billion was contingent on Ukraine passing an IMF-backed 2017 budget and implementing banking system reforms.

"The Ukrainian side has signed the updated memorandum on cooperation," the source said.

In emailed comments to media, central bank governor Valeriia Gontareva did not confirm that the memorandum had been signed by the bank.

(Reporting by Natalia Zinets; Writing by Alessandra Prentice; Editing by Gareth Jones)