Belarus will receive a $3 billion, 10-year loan from the Russian-led Eurasian Economic Community’s anti-crisis fund, Russian Finance Minister Alexei Kudrin said.
The first tranche of the credit will be for $800 million and will be disbursed in 10 to 15 days, while a second tranche of $440 million may be distributed by the end of the year, Kudrin told reporters today in Kiev.
Belarus, which devalued its currency by 36 percent against the dollar last month, is seeking foreign currency to help cover a current-account deficit that reached 16 percent of gross domestic product last year. The east European country is also seeking a separate bailout package from the International Monetary Fund and hopes to sign an agreement in three months, Belarusian Finance Minister Andrei Kharkovets said today.
“Our needs will be defined after the IMF completes its mission,” Kharkovets told reporters in Kiev. The size and maturity of a package from the Washington-based lender “will be determined by the country’s financing needs and its balance of payments.”
The Russian-led Eurasian Economic Community founded a $10 billion anti-crisis fund in 2009 to help members overcome consequences of the global financial crisis. The community’s members are Russia, Kazakhstan, Belarus, Kyrgyzstan, Tajikistan and Uzbekistan. Russia contributed $7.5 billion to the fund, which still had $8.1 billion available to lend, Kudrin said earlier today.
Belarus will not have to make payments on the loan principal for three years, Kudrin said. The country agreed to other measures to boost capital inflows, including $7.5 billion in state asset sales, he said. The sales should be competitive, Kudrin said.
Belarusian President Alexander Lukashenko said May 25 that Russia’s insistence on asset sales was a way to profit from the country’s difficult financial position. Belarus “will not throw anything to anybody for nothing,” he said, the Belta news agency reported.
“The program’s aim is to increase our gold and foreign currency reserves,” Kharkovets said, referring to the conditions on the $3 billion loan. “One of the sources for that is privatization.”
The loan has a floating interest rate tied to the average yield of Russian and Kazakh bonds with a similar maturity, Sergei Shatalov, managing director of the anti-crisis fund, told reporters. “Kazakh debt right now isn’t trading on global markets, so we will take Russian securities with a comparable maturity.”
At current rates, the rate would be 4.1 percent to 4.2 percent, Shatalov said.
“If you look at the financial terms of this loan to Belarus, this is a stabilization loan to support the balance of payments,” Shatalov said. “More than anything this is like an International Monetary Fund program.”