2009-07-01

On 29 June, the Board of Directors of the IMF approved a decision to make US$679 million available to Belarus as the second tranche of the loan of nearly US$2.5 billion which it granted at the beginning of this year. Moreover, the credit line for Belarus has been increased by US$1 billion, as a consequence of which the total value of the loan will reach nearly US$3.5 billion. This means significant financial support for Minsk as it confronts the consequences of the global economic crisis, and at the same time a sign of approval for its previous anti-crisis policy.

The IMF's management stated that its decision resulted from a positive evaluation of the anti-crisis measures taken by the Belarusian government. Special attention was paid to compliance with budgetary discipline, the limitation of wage rises, the adoption of more restrictive monetary and loan policies, and flexible activity on the currency market. At the same time, they emphasised the need to take further actions to liberalise the economy, including increasing the independence of the central bank, ceasing central regulation of prices and wages, and making the Belarusian economy and legal system ready for large-scale privatisation. The IMF is likely to make the availability of the remaining tranches of the loan conditional on the fulfilment of these requirements.

The Fund's financial support is vital for Minsk, whose financial liquidity has improved as a result. This may also help the Belarusian government in its negotiations with Russia, which has been demanding the repayment of nearly US$240 million of debt, which (in Moscow's opinion) has resulted from the payment of the lower price of US$150 per 1000 m3 for the Russian gas between January - April 2009 instead of the US$210 price which applied in those months. <kam>

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