Belarus advised to continue rigorous monetary management, fiscal policies

On 30 April the Eurasian Development Bank, which manages money of the EurAsEC Anticrisis Fund, transferred the fifth $440 million tranche of the financial loan from the EurAsEC Anticrisis Fund to Belarus.

The decision to allocate the tranche was made by the Anticrisis Fund Board via absentee vote on 30 April 2013 after evaluating the fulfillment of the fifth tranche parameters by Belarus as of 1 January 2013 and a noticeable slowdown of the bank lending to the economy in January-April 2013 in comparison with H2 2012.

According to BelTA, the source said that despite the considerable results achieved by the Belarus government in improving the economic situation through implementing a stabilization program with assistance of the EurAsEC Anticrisis Fund loan the Eurasian Development Bank still believes that continuing the rigorous monetary management and fiscal policies remains the key factor for securing steady and balanced growth of the Belarus economy in the medium term.

Further reduction of the inflation rate and the replenishment of international reserves of the country, in particular in view of the repayment of the external public debt that will peak in 2013-2015, require slowdown of the domestic demand. Bringing the salary growth rate in step with labor productivity growth rate remains a fundamental issue. In making decisions concerning the refinancing rate the Eurasian Development Bank recommends taking into account not only the expected inflation rate but also the state of the current account of the balance of payments and dynamics of the growth of bank lending. The reduction of directive-based lending as part of government programs should become the key factor for slowing down the lending to the economy and raising the effectiveness of spending credit resources, the source underlined.

On 4 June 2011 the EurAsEC Anticrisis Fund Council authorized the allocation of a $3 billion financial loan to Belarus. A total of $2.560 billion has been received in five tranches so far for the sake of maintaining the balance of payments and replenishing the international reserves.

As large as $8.513 billion, the EurAsEC Anticrisis Fund was instituted by the governments of Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan on 9 June 2009. The states are also participants of the Eurasian Development Bank. The EurAsEC Anticrisis Fund aims to assist the participating states in overcoming consequences of the global financial crisis, securing their economic and financial stability, and supporting integration processes in the region. The Eurasian Development Bank has been entrusted with managing money of the EurAsEC Anticrisis Fund.