BELARUS NEWS AND ANALYSIS

DATE:

25/08/2009

Belarus Should Increase Reserves to Aid Stability, IMF Says

By Paul Abelsky

Aug. 25 (Bloomberg) -- Belarus needs to boost foreign reserves and gold holdings to help it withstand the fallout of the global economic crisis, the International Monetary Fund said.

The former Soviet state's dwindling reserves pose a "threat" to the country's economic stability, Marek Belka, director of the IMF's European department, said today in the capital Minsk, according to a translated transcript of his remarks published on the government's Web site. The fund's program for Belarus targets raising reserves, he said.

Belarus, whose pipelines handle a fifth of Russia's natural-gas shipments to Europe, is coping with "considerable" problems caused by declining exports to its "traditional foreign markets and primarily to the Russian Federation," Prime Minister Sergei Sidorsky told Belka today.

The Washington-based fund increased its support to Belarus by about $1 billion in June after approving a $2.5 billion loan package in January. Belarus expects to receive $2 billion from the IMF before the end of this year, President Alexander Lukashenko said.

The country is in a "transition period" as it seeks new markets for its goods, Sidorsky said.

The country's reserves, calculated using IMF methodology, were $3.16 billion as of Aug. 1, according to the central bank. The stockpile lost more than 33 percent from a record $4.75 billion reached on Apr. 1, 2008.

Belarus' trade deficit widened more than 77 percent in the first half of the year to $3.95 billion from a $2.23 billion shortfall in the same period in 2008, according the National Statistics Committee. Exports to Russia, the country's main trading partner, plummeted to $2.96 billion from $5.57 billion in the first six months of last year.

Source:

http://www.bloomberg.com/apps/news?pid=20601095&sid=aGJtR1jf3sRY

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