BELARUS NEWS AND ANALYSIS

DATE:

13/11/2008

Russia lends Belarus $2 bln, may trade in rouble

* Reuters, Thursday November 13 2008

MOSCOW, Nov 13 (Reuters) - Russia has agreed to grant Belarus a $2 billion stabilisation loan, and the two countries pledged again to discuss settling oil and gas trades in roubles, finance minister Alexei Kudrin told a news briefing on Thursday.

The first tranche of the loan will be worth $1 billion and will be given at a rate of 3 percent over LIBOR and for a period of 15 years, a ministry spokesman clarified after the briefing.

The terms of the second tranche, also worth $1 billion, will be agreed no later than Feb. 28, 2009, the spokesman said.

Kudrin added that a decision has not yet been made on whether to grant a loan to Iceland. Russia will need to see Iceland's plan for restructuring its banking system before it can come to a decision, he said.

"If this plan satisfies us, we will take a final decision about the size and terms of our participation," Kudrin said.

At the briefing, Kudrin and Belarussian deputy premier Andrei Kobyakov also made plans to meet again in February to prepare a plan for bilateral trade relations.

A key point on the plan they said would be the possibility of settling oil and gas trades in roubles instead of dollars.

"We intend to widen the sphere in which the rouble can be used," Kudrin said.

The idea of conducting oil and gas trading in roubles has long been on the table between the two countries but has never been put into force.

The onset of the global financial crisis has, however, put the rouble under particular pressure as capital outflows increase. The state has been spending tens of billions of dollars in gold and foreign currency reserves to prop up the national currency.

Oil companies have said that the pressure from the government is mounting on them to conduct their trades in roubles, because the state considers rouble-trading of its main commodities as another means of supporting the currency. (Reporting Andrei Ostroukh, writing by Simon Shuster)

Source:

http://www.guardian.co.uk/business/feedarticle/8021063

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