Eurasian Development Bank disbursed the fourth tranche of the credit of the EurAsEC Anti-Crisis Fund to the Republic of Belarus
Almaty, 31 January, 2012. Eurasian Development Bank (EDB) disbursed another tranche of the financial credit to the Republic of Belarus in the amount of US$440 million from the resources of EurAsEC Anti-Crisis Fund (ACF).
The disbursement of the tranche was approved by the Fund Council on 7 December, 2012, as all control targets of the fourth tranche as of 1 October 2012 were met.
The Manager notes the efficiency of efforts undertaken
by the Government and the National Bank of Belarus in the
implementation of the stabilization program, which led
in 2012 to a sharp deceleration of inflation compared
to extremely high levels in the previous year (21.8% compared
to 108.7% in 2011), significant reduction in the current account
deficit
At the same time, the Manager expresses its concerns about the still excessive level of credit expansion. Efforts to stabilize the economy should be continued in order to achieve a further deceleration of inflation, since its current level is still too high. Further deceleration of inflation is achievable if tight monetary and fiscal policies are maintained. This will improve the predictability of economic situation and will impact positively on country risk perceptions of investors and lenders.
Marked deterioration of the country’s trade balance in the second half of 2012 also suggests that stabilization efforts should be continued. Continued credit expansion will lead to a new acceleration of inflation, weaken the balance of payments again, and complicate the task of bringing foreign reserves to the level that ensures economic security of the country.
As per the Fund Council’s decision, Belarus’ Authorities and the ACF Manager have started drafting a Letter of Intent for 2013, which will set out the conditions for the release of subsequent tranches. This will include measures aimed at maintaining tight monetary policy, in order to ensure a further deceleration of inflation and an improvement in the country’s investment prospects.
The extension of the financial credit to Belarus in the amount of US$ 3 billion was approved by the ACF Council on 4th June, 2011. Taking into account the fourth tranche, Belarus has already received US$2.12 billion in proceeds from the said credit, that was granted to strengthen the balance of payments and to replenish international reserves of the country.
Additional Information
Eurasian Development Bank is an international financial institution founded by Russia and Kazakhstan in January 2006 with the mission to facilitate the development of market economies, sustainable economic growth and the expansion of trade and other economic ties between its member states. EDB’ s charter capital exceeds US$1.5 billion. The member states of the Bank are the Republic of Armenia, the Republic of Belarus, the Republic of Kazakhstan, the Kyrgyz Republic, the Russian Federation, and the Republic of Tajikistan. Read more at https://eabr.org/.
The EurAsEC Anti-Crisis Fund (ACF) amounting to US $8.513 billion was formed on 9 June 2009 by the governments of the same six countries. ACF’s objectives are to assist its member countries in overcoming the consequences of the global financial crisis, to ensure their economic and financial stability, and to foster integration processes in the region. ACF member countries signed the Management Agreement with Eurasian Development Bank, giving it the role of the ACF Resources Manager.