BELARUS NEWS AND ANALYSIS

DATE:

27/11/2008

Belarus sees IMF deal this year, FX policy changes

MINSK, Nov 27 (Reuters) - Belarus expects to finish talks with the IMF for a $2 billion loan by the end of the year, with currency policy adjustments one of conditions for clinching the deal, the central bank's deputy chief said on Thursday.

Belarus has asked the International Monetary Fund for a $2 billion loan as a precautionary measure to guard the former Soviet state against the impact of the global financial crisis. It has said it may not use the funds.

"We expect the (IMF) mission's return in December, it will be in the middle of the month...We think it will be the last mission," Pavel Kallaur told journalists.

"The International Monetary Fund has highlighted the need for appropriate adjustments of the exchange rate, taking into account the fluctuations of global currencies."

The Belarussian rouble has been fixed to the dollar this year within a range of 2,100-2,200, with a recommended floor of 2,150. On Thursday, the rate was 2,156/$, weaker than that limit.

The central bank switched to the dollar peg from a previous Russian rouble link. It has talked of fixing the domestic currency to a basket of the dollar, euro and the Russian rouble as of next year.

"The IMF has thinks the move to a currency basket is positive," Kallaur said, adding he does not rule out "additional adjustments in monetary policy" should the situation on global markets change further".

The authorities previously said another IMF demand was cutting state spending. Fiscal prudence, as well as bank recapitalisation, were key demands of the Fund when it agreed to loan neighbouring Ukraine $16.4 billion earlier this month.

Russia revived an idea of creating a common currency with Belarus when it agreed to loan Minsk $2 billion this and next year. Belarussian authorities made few statements on that issue.

(Reporting by Andrei Makhovsky, writing by Sabina Zawadzki; Editing by Toby Chopra) Keywords: BELARUS IMF/ (Kiev bureau; tel: +380 44 244 9150; RM: sabina.zawadzki.reuters.com@reuters.net)

Source:

http://www.iii.co.uk/news/?type=afxnews&articleid=7039815&subject=economic&action=article

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