Press Release No. 08/343

Press Release: IMF Announces Staff-Level Agreement with Belarus on US$2.5 Billion Stand-By Arrangement

December 31, 2008

Mr. Dominique Strauss-Kahn, Managing Director of the International Monetary Fund (IMF), issued the following statement on Belarus today:

"An IMF staff mission and the Belarus authorities have reached agreement, subject to approval by IMF Management and the Executive Board, on an economic program to be supported under a 15-month Stand-By Arrangement for SDR 1.62 billion (about US$2.5 billion). The Executive Board is expected to meet to discuss the program in January 2009. Belarus would be able to draw SDR 517.8 million (about US$800 million) immediately after Board approval.

"Belarus faces a difficult economic situation. Its economy has been growing at an impressive rate for several years but has recently shown signs of overheating. 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.

"The authorities are now taking strong actions to stop the decline in reserves, restore economic stability, and lay the groundwork for a resumption of high growth. The Fund-supported program will help Belarus achieve an orderly adjustment to the external shocks that it is facing and offer protection against its most pressing vulnerabilities.

"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 percent of Belarus' quota in the IMF—and deserve the support of the international community," Mr. Strauss-Kahn said.