IMF Mission Reaches Staff-Level Agreement on Fourth Review Under Stand-By Arrangement with BelarusPress Release No. 10/45
February 17, 2010
An International Monetary Fund (IMF) mission, led by Mr. Chris Jarvis, visited Minsk during February 3-16, 2010 to hold discussions with the Belarusian authorities as part of the fourth and final review of the country’s Stand-By Arrangement (SBA). At the conclusion of the visit, Mr. Jarvis issued the following statement:
“An IMF staff mission and the Belarusian authorities have reached agreement, subject to approval by the IMF Executive Board, on the completion of the fourth review of the SBA with Belarus. The fourth review would be considered by the IMF Executive Board before end-March. Upon completion of the review, an amount of SDR 437.93 million (close to US$700 million) would become available for disbursement.
“Performance under the economic program supported by the SBA has been good. All end-December performance criteria and structural benchmarks were met.
“The recently reached agreement with Russia on the pricing of imported crude oil, in the absence of any offsetting measures, would widen significantly the current account deficit and the general government deficit. The government is taking strong actions to contain the effects of the oil price increase on the budget and the balance of payments, and Fund staff support these measures. Monetary policy and, more specifically, further tightening of the limits on lending under government programs would support the credibility of the exchange rate regime. The current exchange rate regime remains appropriate.
“The authorities made good progress on the financial sector issues. The legal independence of the National Bank of the Republic of Belarus has been enhanced by a recently approved Presidential decree. The process of establishing a special financial agency—which would take over existing loans financing government programs and would assume the role currently played by banks in financing these programs—is well advanced.
“The privatization process has been slower than expected and the authorities need to step it up to reduce the government intervention in the economy and to attract foreign direct investment. The mission reached understandings with the authorities on the measures which would move the privatization process forward.
“The authorities expressed interest in continued cooperation with the IMF after the expiration of the current program. A possible follow-up program with the Fund could be considered upon the completion of the current SBA.”
The 15-month, SDR 1.62 billion (about US$2.46 billion) arrangement was approved by the IMF Executive Board on January 12, 2009 (see Press Release No. 09/05). On June 29, 2009, the IMF financial support under the SBA was increased to SDR2.27 billion (about US$3.52 billion) (see Press release No. 09/241).