## Press Release: IMF Executive Board Completes First Review Under Stand-By Arrangement with Belarus, Approves US$679.2 Million Disbursement, and Increases Financial Support to US$3.52 Billion

_IMF News, June 29, 2009_

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**Canonical URL:** [Press Release: IMF Executive Board Completes First Review Under Stand-By Arrangement with Belarus, Approves US$679.2 Million Disbursement, and Increases Financial Support to US$3.52 Billion](https://www.imf.org/en/news/articles/2015/09/14/01/49/pr09241)

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## Bibliographic details
- Published: June 29, 2009

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### Executive Board decisions and financing
- Completed the first review of Belarus’s performance under a Stand-By Arrangement (SBA).
- Increased financial support to SDR 2.27 billion (about US$3.52 billion), equivalent to 587 percent of Belarus’s quota or 7 percent of its GDP.
- Approved disbursement of SDR 437.93 million (about US$679.2 million).
- Total disbursements under the program so far: SDR 955.73 million (about US$1.48 billion).
- Granted a waiver of nonobservance of end-March performance criterion on net international reserves.
- Approved a modification of the end-June performance criteria.
- Notes that the original 15-month SDR 1.62 billion (about US$2.51 billion) SBA was approved on January 12, 2009 (Press Release No. 09/05).

### Economic context and program rationale
- Purpose of the revised arrangement: support the government's economic program and help Belarus contain the effects of a greater than expected impact from the global financial crisis.
- Stated drivers of the shock: a fall in external demand and volatile cross-currency movements since the program’s approval in January.
- The strengthened adjustment strategy seeks to balance additional policy adjustment with enhanced IMF financial support to close the financing gap during the program period.

### Policy measures and conditionality under the revised program
- Fiscal policy:
  - Authorities will maintain a balanced budget in 2009 despite lower revenues.
  - Plan to postpone public sector wage increases.
  - Planned increase in targeted social assistance to the most vulnerable households.
- Monetary and exchange rate policy:
  - Keep monetary policy adequately tight.
  - Authorities have depreciated the rubel and widened the exchange rate band to ±10 percent around the parity rate.
  - Tightened monetary policy through increases in policy interest rates and recommendations to commercial banks to increase interest rates on rubel term household deposits.
  - Emphasis on maintaining tight monetary policy and resisting excessive increases in credit to the economy.
- Structural reforms:
  - Deepen structural reforms, including stepped up efforts toward liberalizing the economy and preparing for privatization.
  - Concrete steps: enactment of a privatization law that conforms to best practices, and establishment of a privatization agency capable of advancing an ambitious privatization agenda.
  - Other structural measures: legislative changes to increase the central bank’s independence; plans to reduce further price and wage controls; remove mandatory production and employment targets for private companies.
  - Intended outcomes: improve governance, the business climate, long-run growth prospects, and external stability.

### Key statements from IMF management
- Mr. Takatoshi Kato, Deputy Managing Director and Acting Chair, stated:
  - Belarus’s economy was hit hard by a fall in external demand and volatile cross-currency movements since the program was approved in January.
  - The revised program:
    - Responds to these developments by strengthening the adjustment strategy.
    - Strikes a balance between additional policy adjustment, using all policy instruments available, and enhanced IMF financial support to close the financing gap.
    - Includes stepped up efforts toward liberalizing the economy and preparing for privatization to bolster growth prospects over the medium term.
  - On exchange rate and monetary measures:
    - Depreciation of the rubel and widening of the exchange rate band should help improve the current account, allow greater exchange rate flexibility, and alleviate pressure on international reserves.
    - Tightened monetary policy and higher rubel deposit rates should increase the attractiveness of holding rubel deposits, instill confidence in the currency, and help build central bank credibility.
  - On fiscal and social measures:
    - Maintaining a balanced general government budget in 2009 despite lower projected revenue is commendable.
    - The planned increase in targeted social assistance will help those most severely affected by the crisis.
  - On structural reform importance:
    - Stronger efforts to liberalize the economy and prepare for privatization are essential to improve prospects for long-run growth and external stability.

*Press Release No. 09/241, June 29, 2009.*

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## References

- [Republic of Belarus and the IMF](http://www.imf.org/external/country/BLR/index.htm)
- [Press Releases](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [https://www.imf.org/external/mmedia/view.asp?eventID=1537](https://www.imf.org/external/mmedia/view.asp?eventID=1537)
- [Press Release No. 09/05](https://www.imf.org/external/np/sec/pr/2009/pr0905.htm)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2015/09/14/01/49/pr09241_