BELARUS NEWS AND ANALYSIS
DATE:
31/12/2008
IMF Announces Plan To Loan Belarus $2.5 Billion
(Updates with additional comments, details) WASHINGTON -(Dow Jones)- The International Monetary Fund on Wednesday announced plans to loan Belarus $2.5 billion to help the Eastern European country cope with the global economic crisis.
If the fund's executive board approves the 15-month standby facility in a decision, likely to be made in January, Belarus would get immediate access to about $800 million of the financing.
"The Fund-supported program will help Belarus achieve an orderly adjustment to the external shocks that it is facing and offer protection against its most pressing vulnerabilities," IMF Managing Director Dominique Strauss-Kahn said in a statement.
Belarus, facing a sharp drop in international reserves, is taking "strong actions" to restore economic stability, Strauss-Kahn said. Thus, the program deserves the support of the international community, he said.
As part of the IMF program, the government agreed to strengthen its monetary and exchange rate policy framework, as well as to tighten fiscal policy through spending cuts for public investment and public-sector wage constraints. Meanwhile, the social safety net will be strengthened to protect the poor.
In November, Russia pledged a $2 billion stabilization loan to the former Soviet country.
The IMF has been called on in recent months to provide over $40 billion in rescue financing to help developing economies caught off-guard by the drying up global liquidity, with much of its assistance focused on Eastern Europe. Latvia, Ukraine and Hungary have also recently received IMF loans.
-By Tom Barkley, Dow Jones Newswires; 202-862-9275; tom.barkley@dowjones.com
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