BELARUS NEWS AND ANALYSIS

DATE:

15/01/2009

Belarus receives 1st tranche of IMF loan-c.bank

MINSK, Jan 15 (Reuters) - Belarus has received $788 million from the International Monetary Fund, the first tranche of a $2.5 billion credit, and expects to get the rest over the next 15 months, the central bank said on Thursday.

"It (the money received) has been included in our gold and forex reserves and will be used for supporting the Belarussian rouble exchange rate," central bank spokesman Mikhail Zhuravovich told Reuters.

Belarus launched talks with the IMF in October with the aim of creating a "security cushion" for the ex-Soviet state's economy, much of which remains in state hands.

Belarus, led by President Alexander Lukashenko since 1994, has suffered less from the effects of the world financial crisis than neighbouring Ukraine or Russia.

To meet IMF requirements, authorities cut salaries in the state sector, raised rates for communal services, devalued the Belarussian rouble by 20 percent and raised the refinancing rate.

They have also pledged to cut budget spending and have started recapitalising banks.

Lukashenko views Russia as his country's main ally but in the past two years has sought improved relations with the West and called for greater economic liberalisation and selective privatisation.

The IMF has approved Belarus's anti-crisis plan, but predicted the economy will shrink by 1-2 percent in 2009 and 2010 compared to 10 percent growth last year.

The government is standing by a forecast of 5.0 percent growth in the first half of 2009.

Belarus has already received a $1 billion credit from Russia and anticipates a further credit of the same size in February. (Reporting by Andrei Makhovsky, writing by Ron Popeski)

Source:

http://in.reuters.com/article/asiaCompanyAndMarkets/idINLF8079120090115

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