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Belarus praised for fulfilling EurAsEC loan terms

MINSK, 26 October (BelTA) - Experts of the Eurasian Development Bank (EDB), the asset manager of the Anticrisis Fund (ACF) of the Eurasian Economic Community, evaluated the performance by Belarus of the financial credit from the fund, BelTA learnt from the EDB press center.

The EDB delegation was in Minsk from 17 to 24 October. Meetings were held with specialists from the National Bank, ministries of finance and economy, other ministries of Belarus, representatives of international financial organizations. The EDB experts submitted the main findings to Deputy Prime Minister of Belarus Sergei Rumas, Chairperson of the Board of the National Bank Nadezhda Yermakova, Finance Minister Andrei Kharkovets and Economy Minister Nikolai Snopkov.

The EDB experts praised the progress made by Belarus in the implementation of several reforms included in the stabilization program of the Government and the National Bank of Belarus. Progress, according to the EDB experts, has been made in the transition to the market-driven exchange rate of the ruble, strengthening the independence of the National Bank and creating the Development Bank of Belarus. The EDB team also welcomed the intention of the country to balance the state budget this year.

“Progress is obvious in the fulfillment of certain terms of the second tranche of the EurAsEC loan. We also welcome the Government’s plans for 2012 that provide for execution of the state budget in a balanced manner and fro reducing the lending the economy to a level that would redress the accumulated imbalances,” said EDB Managing Director for the Anticrisis Fund Sergei Shatalov. For the long-term development of the country it is essential to continue the reforms that would ensure macroeconomic stabilization and reduction of the yet big deficit in the balance of payments. The EurAsEC Anticrisis Fund will continue close cooperation with the ministries and departments in order to achieve this important goal.”

The EDB experts noted that the soft monetary policy which manifests itself in maintaining interest rates at the level significantly below the inflation, stimulates excessive lending to the economy, fuels the domestic demand, leads to the substantial balance of payments deficit, contributes towards the inflation and increases risks in the banking system. Level of administrative concessional lending through public programs is still high. It fuels inflation, increases budget spending to subsidize interest rates on concessional loans and reduces the incentive to invest on the market terms. The path to the stable exchange rate, lower inflation and new investment, according to the experts, is through raising interest rates to a level not lower than the projected inflation and reducing the excessive lending.

The Eurasian Development Bank is an international financial institution established by Russia and Kazakhstan in January 2006 to facilitate the development of market economy in the participating countries, their sustainable economic growth and expansion of mutual trade and economic ties. The authorized capital of the EDB exceeds $1.5 billion. The EBD member states are Russia, Kazakhstan, Belarus, Tajikistan, Armenia and Kyrgyzstan.

The EurAsEC Anticrisis Fund in the amount of $8.513 billion was set up on 9 June 2009 by the Governments of Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia and Tajikistan. The objective of the fund is to assist the member countries in coping with the impact of the global financial crisis, to ensure their economic and financial stability and support integration in the region. States parties to the Anticrisis Fund vested the EDB with the functions of the Fund’s asset manager and signed the agreement with the Bank on the management of the assets of the Fund.