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IMF and Belarus sign staff-level agreement for $2.5 billion

An economic programme to be supported under a 15-month stand-by arrangement for $2.5 billion

The International Monetary Fund staff mission and the Belarus authorities have reached an agreement, subject to approval by IMF management and the executive board, on an economic programme to be supported under a 15-month stand-by arrangement for $2.5 billion.

 

If the fund’s executive board approves the 15-month standby facility in a decision expected in January 2009, Belarus would get immediate access to about SDR517.8 million or $800 million of the financing.

 

Dominique Strauss-Kahn, managing director of the International Monetary Fund (IMF), said: Belarus faces a difficult economic situation. Belarus has also been hit hard by the global economic crisis. Adverse terms of trade movements, falling demand from trading partners and difficulties in accessing trade and other external finance have led to a decline in Belarus’ international reserves.

 

Measures agreed include a strengthened monetary and exchange rate policy framework, fiscal restraint through cuts in public investment and directed lending by banks and strict public-sector wage restraint. The social safety net will be strengthened to protect the most vulnerable.

 

The strong measures that the authorities are taking justify the exceptional level of access to fund resources, equivalent to around 420% of Belarus’ quota in the IMF and deserve the support of the international community.