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IMF may increase loan to Belarus

The International Monetary Fund (IMF) has reached a staff-level agreement with the Belarusian authorities to increase its loan to the country by $1 billion, Chris Jarvis, head of the IMF’s mission to Belarus, said in a statement on June 10, BelaPAN said. 

“The staff will recommend to IMF Management and the Executive Board an increase in IMF financial support for Belarus by SDR 651.4 million (about US$1 billion),” Mr. Jarvis said.

Belarus would also receive a second disbursement of $675 million upon the board’s approval.

The IMF mission worked in Belarus between April 29 and May 13, holding discussions on the first review of the country’s stand-by loan arrangement.

“This increase is justified because Belarus’ financing needs arising from the global economic crisis have increased, and because the government and the central bank are making strong efforts to solve their problems,” Mr. Jarvis said.

Among the “stepped up efforts by the authorities,” the IMF officer cited a wider use of flexibility within the exchange rate band to support adjustment in the current account; an agreement on tight monetary policy; an attempt to pursue a balanced budget, even in the face of greater revenue losses from the downturn; and the intensification of structural reforms that will “improve Belarus’s medium-term prospects, including a stronger privatization effort through the creation of a new privatization agency.”

The IMF agreed to lend Belarus $2.46 billion in late 2008. Belarus requested the loan from the IMF last October, saying that it was needed for replenishing the country’s gold and foreign exchange reserves amid the global financial crisis.

The international organization made available some $787.9 million for Belarus in January and said that “the remainder will be phased thereafter, subject to quarterly reviews.”