BELARUS NEWS AND ANALYSIS

DATE:

03/02/2009

Russia considering 100 bln rouble loan for Belarus

MOSCOW, Feb 3 (Reuters) - Belarus has asked Russia for a new loan of 100 billion roubles ($2.77 billion), Russian Finance Minister Alexei Kudrin was quoted as saying on Tuesday, and a Kremlin aide hinted the request will be looked on favourably.

Russia granted Belarus a $2 billion 15-year stabilisation loan last year, with the second half of the money due to be paid this month.

The two countries have also talked about expanding the use of the rouble in bilateral trade -- a move which could help support the beleaguered Russian currency.

"The (new) loan was requested for use in extending settlement in Russian roubles," Kudrin told Itar-Tass news agency. "We have been given two weeks for preparation and conclusion on this loan."

Top Kremlin aide Sergei Prikhodko said the two countries' central banks and government would decide on the loan.

"Yes, we will look favourably at the loan... but we need to make sure that it contributes to our overall integration strategy," said Prikhodko, who advises Russia's President Dmitry Medvedev on foreign policy.

The comments came as Medvedev started talks in the Kremlin with Belarussian counterpart Alexander Lukashenko, and appear to suggest a turnaround in thinking over the past two weeks -- Russia's Deputy Finance Minister Dmitry Pankin said on Jan. 24 that Moscow was not interested in giving Belarus a rouble loan.

Russia has been pushing for greater use of roubles with its trading partners, in part as it seeks to restore demand for the currency after foreign investors fled emerging markets last autumn. Belarus and Kazakhstan are seen as the most likely candidates for agreeing to such a scheme.

Belarus accounts for almost 5 percent of Russia's exports, and a loan of Russian roubles would enable it to use them to pay for some of the goods.

The Russian rouble hit a fresh record low versus a euro-dollar basket on Tuesday, but stayed within the central bank's trading corridor .

Minsk devalued the Belarussian rouble by 20 percent on Jan. 1, partly to meet IMF conditions set on a $2.5 billion loan and also to catch up with a slide in value of the Russian currency.

Discussions over a monetary union between Russia and Belarus began in Sept. 1993, shortly after the break-up of the rouble zone. But talks stalled as Russian reforms advanced and Belarus' economy stayed along Soviet-era command lines. (Reporting by Oleg Shchedrov, Gleb Bryanski and Toni Vorobyova)

Source:

http://www.guardian.co.uk/business/feedarticle/8340247

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