No new IMF program for Belarus yet

The International Monetary Fund is not negotiating a new program with Belarus, however, the possibility of a new program in the future has not been ruled out.

The information was released by head of the IMF mission in Belarus David Hofman on 28 October.

David Hofman remarked that the support rendered by the IMF to Belarus or any other country in line with a program is always based on several conditions that require economy corrections. Such corrections are meant to adjust the economic policy in order to fix existing problems regarding the state of the balance of payments, explained the IMF mission head. “At present we don’t have such a program of reforms, therefore, such a program is not being discussed,” said the IMF mission head. He added that the possibility that a program may be implemented in the future has not been ruled out.

Asked whether negotiations on a new program may begin if there is no final draft of the program, David Hofman said: “Yes, they can. Because, as a rule, negotiations begin before a program is fully developed”. The IMF mission head mentioned several conditions for that. “A solid base to start the talks is needed, a clear understanding of the possibility of coming to terms is needed. Apart from that, the authorities should have the resolve (at the top level) to carry out the program,” said David Hofman.

From January 2009 through April 2010 Belarus accomplished a standby program backed by a $3.5 billion IMF loan. It allowed the country to secure positive dynamics of several economy and monetary management indicators. This year has seen the peak of the repayment of the loan.

Led by David Hofman, an IMF mission is in Minsk on 17-28 October for the sake of the fifth post-program monitoring discussions of the Belarus economy.

The International Monetary Fund is a specialized UN institution headquartered in Washington, USA. 27 December 1945 is the IMF’s official foundation date. Belarus has been an IMF member since 1992. The IMF operation in Belarus is aimed at working together with the government and the National Bank in preparing economic policy documents, focusing on taxation, budgeting, monetary management, exchange rate, and trade policy for the sake of achieving considerable economic growth, low inflation and a stable balance of payments.

In 1992-2008 Belarus tapped into IMF resources twice: $217.2 million from the Systemic Transformation Facility and $77.4 million via the standby lending mechanism. In February 2005 Belarus fully paid out those loans.