No possibilities to refinance the IMF loan, hopes for EurAsEC Anti-Crisis Fund

April 22, 2016 18:20

An IMF mission will be working in Minsk from 18 October until October 2012 to conduct the third post-program monitoring.


In 2013, Belarus will have to repay about USD 2.9 billion in foreign debt settlement. Major repayment will be addressed to the IMF. This debt is not subject to refinancing, while according to IMF estimations, the current account balance in 2013 will not allow Belarus to refinance it independently.

On October 9-13, the Belarusian delegation participated in the annual session of the Council of the Executives of the World Bank and the International Monetary Fund. After the meeting, the Ministry of Economy announced that cooperation with IMF would only be limited to consulting on technical support for Belarus. No new loan program is planned.

According to IMF forecasts for 2013, Belarus’ current account balance will be negative and will account for 5.8% of the GDP. In this situation, Belarus will not manage to independently refinance a debt of USD 2.9 billion. 

Belarus has made efforts to refinance the foreign debt through borrowing from the domestic market. The first transaction on Belarus foreign currency bonds  amounting to USD 100 million was carried out by Bank BelVEB. On October 17, it announced that it invites egal entities to invest in foreign currency bonds for a period of 3,5 years in the amount of USD 150 million. The potential investors can offer their own rates and the Ministry of Finance will choose the most competitive offer. In these conditions, the remaining tranches of the loan from EurAsEC Anti-Crisis Fund are the largest and most likely resources to refinance the existing debt. 

However, obligation of the Belarusian side stated in the letter of intent will not be performed to the full. Most crucially, it needs to fulfill an obligation to sell state assets of USD 2.5 billion by the end of 2012. Currently, there is no single realistic transaction which would account for fulfilling this obligation. In this regard, allocation of new tranches of the loan is not evident and will most likely be postponed, since growth of pressure in the foreign exchange market will force Belarus to take a more active stance in negotiations on certain assets.

Thus, in the situation when the Belarusian authorities have limited external foreign currency earnings and are pressed to repay foreign debt, they will have to make concessions regarding terms and conditions for privatization of state-owned property by Russian investors. Otherwise, the tranches of the EurAsEC Anti-Crisis Fund loan will be postponed for an uncertain term.

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