IMF and Belarus: prospects for cooperation

Mrs.Yermakova confirmed the interest of the Belarusian side in implementing the new IMF standby program with corresponding financial support (about USD 3.5 bln.). She said that currently “the IMF also supports the position that cooperation with Belarus requires a program”.

Meanwhile, the National Bank chairman emphasized that the question concerning the start of the new program is mainly a political one. “Probably not every EU-member will support us, but we hope that common sense will nevertheless prevail”, she said.

In addition Mrs. Yermakova showed her confidence that Belarus will be able to pay off the debt of USD 3.5 bln. owed to the IMF even without launching the new program.

Nevertheless it is obvious that in the current situation Belarus needs to attract new foreign investments in order to pay off foreign credits and loans. As of January 1, 2012 the aggregate foreign debt of Belarus reached a record-breaking level of USD34.028 bln., or 103.6% of the GDP, including the short-term foreign debt (during up to 1 year) which made up USD14.450 bln., or 44% to the GDP.

The adjusted schedule of payments connected with the servicing and discharging of the IMF reserve credit are as follow: 2012 – USD485 mln., 2013 – USD1778 mln., 2014 – USD1418 mln. and 2015 – USD88 mln.

On April 13, 2012, in paying off its credit obligations to the IMF within the first stand by program Belarus exercised the first payback of the main debt in the amount of SDR64.7 mln. (equivalent to USD 99.8 mln.).

As a result, the remaining debt on the main IMF loan decreased from USD3.484 bln. to USD3.422 bln. as of May 1 (taking into account the fluctuations of the SDR-USD exchange rate). In this case, the stabilization of the SDR exchange rate to USD from USD1.53527 as of January 1, 2012 to USD1.55204 as of May 1 resulted in the increase of the dollar equivalent of the main debt by USD37 mln.

Previously, during 2009-2012, Belarus paid interest and commission payments connected with the servicing of the first reserve credit in the total amount of about USD 186.8 mln.

Thus the need of Belarus in the second Stand by program is connected with the necessity to make payments on the first IMF reserve credit. That is why one may well expect that the authorities will make further political concessions to advance their chances for being granted further financing by the Fund.