Press Release: IMF Reaches Staff-Level Agreement with Belarus on the First Review of Stand-By Arrangement, Request for Augmentation
June 10, 2009Press Release No. 09/202
June 10, 2009
Mr. Chris Jarvis, head of an International Monetary Fund (IMF) mission to Belarus, issued the following statement in Washington D.C. today on the first review under the country’s Stand-By Arrangement (SBA):
“The IMF reached staff-level agreement with the Belarusian authorities on the conclusion of the first review under the SBA today, completing the work carried out by the mission in Minsk during April 29-May 13. The staff will recommend to IMF Management and the Executive Board an increase in IMF financial support for Belarus by SDR 651.4 million (about US$1 billion). This increase is justified because Belarus’s financing needs arising from the global economic crisis have increased, and because the government and the central bank are making strong efforts to solve their problems.
“Stepped up efforts by the authorities include:
• Making more use of flexibility within the exchange rate band to support adjustment in the current account;
• Agreement on tight monetary policy, which will help keep the exchange rate stable and inflation low;
• Continuing to pursue a balanced budget, even in the face of greater revenue losses from the downturn;
• Intensifying structural reforms that will improve Belarus’s medium-term prospects, including a stronger privatization effort through the creation of a new privatization agency.
“The authorities’ Letter of Intent will now be submitted to IMF Management for approval. Together with a staff report describing the economic situation and the authorities’ policies, the Letter will then be considered by the IMF Executive Board in the coming weeks. Subject to Board approval, a second augmented tranche of the IMF loan in the amount of SDR 437.9 million (about US$675 million) would be disbursed immediately after the Board meeting.”
The 15-month, SDR 1.62 billion (about US$2.46 billion) Stand-By Arrangement for Belarus was approved on January 12, 2009 (see Press Release No. 09/05). The approval of the augmentation by the Executive Board would bring the access to 587.4% of Belarus quota.