IMF loans 680 million to Belarus

Jul 2, 2009, 14:20 GMT

Minsk - The International Monetary Fund (IMF) on Wednesday loaned to Belarus 680 million dollars badly needed to cover a widening budget deficit, the Belapan news agency reported.

It was the second tranche of a credit programme aimed at increasing Belarus' gold reserves and creating an emergency fund to cushion future economic shocks, said Anatoly Drozdov, National Bank of Belarus (NBB) spokesman.

The IMF in January approved a stand-by loan to Belarus with a total value of 2.46 billion dollars, aimed at stabilising the former Soviet republic's economy.

The first tranche of 788 million dollars transferred in January was to have been followed by a second tranche in April, but delays in NBB reforms demanded by the Fund delayed the second portion of the loan until July.

The IMF after reviewing Belarus' economic situation in late June increased the total value of the stand-by loan programme to 3.52 million dollars.

Belarusian economic reforms needed to qualify for further instalments of the loan include elimination of deficit spending, an overall balanced 2009 budget, tighter NBB money supply policy, a widening of the float to the national currency the rouble, IMF officials said.

Aleksander Lukashenko, Belarus' authoritarian President, in past years had resisted accepting loans from the IMF saying the agency's credits were part of a Western Capitalist plot to take over the country's centrally-planned economy.

Belarus' economy historically has depended on trade with Russia. Worsening relations with the Kremlin have forced Lukashenko to search for government income and markets elsewhere.

Kremlin fuel price hikes and excise barriers have left Belarus with its trade deficit tripled in size oover the first quarter of 2009 alone, and plummeting budget revenues, the Interfax news agency reported.