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Belarus continues loan talks with IMF

Belarus continues talks with the International Monetary Fund (IMF) about a new loan to be supported by an economic program, Nadzeya Yermakova, head of the National Bank of Belarus (NBB), said at a news conference held in Minsk on Monday, BelaPAN said.

The Belarusian authorities plan to discuss the possibility of a new stand-by arrangement with an IMF team that will visit Minsk in February, said Ms. Yermakova.

“We suggest that we refinance the debt that we owe to the IMF,” she said without elaborating.

Belarus reportedly owes the IMF $3.8 billion at present.

The government is to earmark this year more than $1.6 billion toward the settlement of its external debt. In each of the next two years, the amount is projected to exceed $3 billion.

According to unconfirmed reports, the IMF wants the economic program to provide for tight monetary, budget and tax policies, as well as structural reforms in the real sector of the economy.

Belarus formally applied to the IMF for a loan of up to $7 billion in May last year, after it borrowed a total of $3.46 billion from the Fund in 2009 and 2010 under a stand-by arrangement.

While talking in Minsk in October last year, Christopher Jarvis, head of the IMF mission to Belarus, said that the Belarusian authorities needed to demonstrate a clear commitment to stability and reform and to reflect this commitment in their actions before negotiations on their request for financial support from the Fund could begin. "We are now waiting to see some actions from the government and the National Bank," he said, adding that the authorities had already started to take some welcome steps.

Later that month, Ms. Yermakova said that the IMF might reject the Belarusian government’s loan request on politically motivated grounds. She said that IMF representatives had indicated that the release of all political prisoners in Belarus was a prerequisite for the approval of the loan. "But they [political prisoners] do not want to go out," she noted.

At a news conference on December 23, Alyaksandr Lukashenka said that Belarus was “ready” to hold talks with the IMF to borrow $5 billion from it. "If they give us $5 billion, we`ll accept it. I think that the most realistic amount without conditions is $2.5 billion to $3 billion," the Belarusian leader said.