Russia-led bailout fund approves $440 mln Belarus loan tranche

Fri Dec 7, 2012 10:30am EST

Related Topics

* Tranche is part of $3 bln loan from anti-crisis fund

* Belarus undertook 65 percent devaluation of rouble

MINSK Dec 7 (Reuters) - A Russia-led bailout fund on Friday agreed to give Belarus a fresh $440 million loan tranche, part of a larger package that helped Minsk overcome financial crisis last year without the International Monetary Fund.

"A positive decision has been taken," Russian Finance Minister Anton Siluanov told reporters in Minsk.

Belarus, Russia's closest ally among the former Soviet republics, had to devalue its rouble by 65 percent last year in order to cut a large current account brought on by excessive government spending.

The $3 billion loan from the Russia-led EurAsEC Anti-Crisis fund allowed Minsk to rebuild foreign currency reserves and stabilise the economy without committing to broad market reforms required by the International Monetary Fund.

Last October, the IMF warned Belarus its financial stability was once again at risk and urged the government to tighten its monetary and fiscal policies after relaxing them earlier this year.

Belarussian President Alexander Lukashenko, in power since 1994, has kept in place a government-dominated economy with full employment and price controls.

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