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IMF, Serbia agree 1-billion-euro standby loan
Aug 31, 2011, 11:34 GMT
Belgrade - Serbia and the International Monetary Fund (IMF) said Wednesday that they reached an agreement on a 1-billion-euro (1.4-billion-dollar) standby deal in a bid to bolster the stability of the Balkan country's economy.
Belgrade officials said Serbia planned to draw the funds, available over 18 months, only in case a dwindling of foreign currency reserves jeopardizes the economic stability.
The IMF revised Serbia's growth projections downward, from 3 to 2 per cent in 2011 and from 4.5 to 3 per cent in the coming year. It made the standby funding conditional on Belgrade spending cuts.
But it did allow Serbia to increase the budget deficit by 0.4 per cent in 2011, to 4.5 per cent of the gross domestic product.
Serbia's previous, two-year, 2.9-billion-euro standby arrangement with the IMF expired in April.
The new agreement must still be approved by the IMF managing board in September.
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