Almaty, 23 January 2012. Experts from the Eurasian Development Bank (EDB), the ACF Manager, visited Minsk between 18 and 21 January 2012 to assess the macroeconomic situation and discuss with the Belarusian government the renewal of the Letter of Intent. This task was set by the Fund’s Council at a session in Moscow on 28 November 2011.
The Letter of Intent relies on the Belarusian government’s Stabilisation Programme backed by the ACF $3bn financial credit. The document needed to be amended because of significant socioeconomic changes, in particular the devaluation of the national currency and a threefold price increase in 2011.
Although inflation was restrained by the end of 2011, primarily through administrative control over prices, the stabilisation of the exchange rate, and toughened monetary policy, it would be premature to say that the country’s economy has stabilised, given in particular the negative forecasts for the global economy and the shrinkage of foreign demand.
The ACF Manager believes that in these conditions the Belarusian government should use its best endeavours to improve economic sustainability against external shocks and to further reduce structural disproportions caused by the excessive stimulation of internal demand in the past years, including 2011.
At the meetings with the National Bank, the Ministry of Finance and the Ministry of Economy the parties discussed main amendments to the Letter of Intent and the government’s stabilisation programme, and preliminary information on the performance of the conditions of the third instalment of the ACF credit.
Discussion will be continued in the next few weeks in order to produce an amended Letter of Intent for its approval at the next session of the Fund’s Council.
On 4 June 2011, the ACF Council approved the provision of a $3bn financial credit to Belarus. In 2011 the EDB paid the first two tranches of $800m and $440m respectively.
