Belarus Seeks $3b IMF Loan as Lukashenko Tilts Away From Russia

  • Government sees ``comfortable'' 10-year IMF loan at 2.28%
  • Belarus needs new borrowing to help itself pay foreign debt

Belarus wants to borrow $3 billion from the International Monetary Fund for 10 years at 2.28 percent to re-balance its finances as it struggles to overcome the impact of recession in its main economic partner, Russia.

Belarus needs to borrow under terms “as comfortable as possible” to meet its foreign debt obligations, Prime Minister Andrey Kobyakov told Lukashenko during the meeting. The government and the IMF kicked off negotiations on a new loan last month. The Washington-based fund wants Belarus to pursue an economic overhaul and increase the role of private companies, measures President Aleksandr Lukashenko said were “reasonable” and must be implemented sooner or later.

“Nobody, including the Russians, lends to us at such an interest rate,” said Lukashenko, who added the government can receive the loan under the IMF’s extended fund facility, according to the state-owned Belta news service on Monday. “We must act in the interest of our people.”

The country of 9.5 million is fighting the effects of the recession and currency crisis in Russia, which accounts for about half of the nation’s total trade. While Belarus is seeking a similar amount of financing from the Russian-led Eurasian Fund for Stabilization and Development, Lukashenko has been reluctant to allow a Russian military air base into his country. Last week, a meeting between Lukashenko and Vladimir Putin was postponed after Turkey’s military shot down a Russian bomber near the border with Syria. The Belarusian leader instead hosted Ilham Aliyev, the president of Azerbaijan, an oil-exporting fellow post-Soviet nation with close ties to Turkey.

Belarus last received a $3.5 billion loan from the IMF in 2009, which it repayed in full in March. The national currency, this year’s third-worst performer globally after Zambia’s kwacha and the Kazakh tenge, weakened 0.2 percent to 18,058 against the dollar as of 4:00 p.m. in Minsk. Dollar-denominated government debt maturing in 2018 gained for the sixth consecutive day, sending the yield down to 6.69 percent.

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