2008.12.3110:12:00UTC+00Belarus and IMF agree on Stand-By Arrangement

Belarus and the IMF have reached agreement on an economic program, the IMF said Wednesday. The deal for a 15-month Stand-By arrangement program for SDR 1.62 billion or $2.5 billion will go into effect after approval by the IMF Executive Board, which is expected to meet in January. Belarus would be able to draw about $800 million immediately after the Board approval, the IMF said.

After years of impressive economic growth, the Belarus economy had showed signs of overheating in recent months, the IMF observed. This had been exacerbated by the global economic crisis. Belarus has been battered by adverse terms of trade movements, falling demand from trading partners and difficulties in accessing trade and external finance. This had led to a decline in the country's international reserves and a difficult economic situation, the IMF pointed out.

To remedy the situation and to restore economic stability the authorities had taken several firm steps. These included strengthened monetary and exchange rate policy framework, fiscal restraint by reducing public investment and strict public-sector wage restraint, while at the same time bolstering the social safety net.

"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. Dominique Strauss-Kahn Managing Director of the IMF said.

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