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Belarus sets hope for IMF bailout loan

English.news.cn   2011-06-07 20:29:47 FeedbackPrintRSS

MINSK, June 7 (Xinhua) -- Financially struggling Belarus wants to secure the International Monetary Fund (IMF) bailout loan of up to 8 billion U.S. dollars, which is expected to help Belarus to improve its economic situation.

On Monday, Deputy Prime Minister Sergei Rumas met a visiting IMF mission, which is staying in Minsk until June 14 to assess the economic situation as a follow-up to the IMF program Belarus ran in 2009-2010.

During the two years, Belarus received five tranches totaling 3.46 billion dollars. The program was completed in March of 2010.

Analysts said Belarus may need as much as 9 billion dollars in aid to get the economy on track. Earlier, finance ministers of six former Soviet states have agreed to give Belarus a bailout loan for 10 years with a three years grace period.

The loan will be arranged from the special Russia-led bailout fund of the Eurasian economic community. The first tranche of 800 million dollars will be transferred within the next 10 days and another 440 million by the end of 2011.

Totally, Belarus will receive 3 billion dollars. The loan has a floating interest rate tied to the average yield of Russian and Kazakh bonds with a similar maturity. At current rates, the rate would be 4.1 percent to 4.2 percent.

As a key condition of the Russian loan, Belarus must privatize state assets worth 7.5 billion dollars within the next three years. The enterprises to be privatized were not specified, but Russia has had its sights on Belarusian energy assets such as oil refineries and Beltransgas, the state-owned gas pipeline network that supplies domestic homes and forwards the gas to Europe.

Belarus has been hit by a dire cash shortage that was sparked by a jump in the price for Russian energy as well as massive state spending ahead of presidential elections last year.

Last month, Belarusian national bank cut the value of its ruble by 56 percent against the dollar. The devaluation has spread panic throughout the country, with people clearing store shelves and queuing up at currency exchange offices trying to protect their savings.

Editor: Xiong Tong
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