* Minsk must privatise state companies - Kudrin
* Belarus currency crisis has pushed it towards Russia
* Belarus's Lukashenko is on poor terms with West
(Adds no statements to press after Putin-Lukashenko meeting)
By Gleb Bryansky and Andrei Makhovsky
MINSK, May 19 Russia urged Belarus on Thursday
to sell off state assets in order to secure a credit lifeline
from a Moscow-led bailout fund as a currency crisis deepened
in the former Soviet republic.
Belarus could raise $7.5 billion to $9.0 billion from
privatisation in the next two to three years to supplement a
proposed $3.5 billion bailout loan, Russian Finance Minister
Alexei Kudrin said.
"I think Belarus has enough assets to complement the
lending programme with necessary foreign currency resources
that can be obtained in the next two to three years to
stabilise the economy," Kudrin told reporters.
Moscow itself could buy Beltransgas, Belarus' gas pipeline
network operator, which tranships Russian gas to Europe, said
Kudrin, who visited Minsk with Russian Prime Minister Vladimir
The Belarussian ruble continued a downward spiral,
weakening to 8,000/9,000 against the dollar BYR= in thin
trading on the interbank market, from 7,100/7,600 on
Wednesday, market sources told Reuters.
Market players were awaiting the outcome of a meeting
between Putin and Belarussian President Alexander Lukashenko
with speculation that the Russian leader might disclose more
details of a Moscow-backed aid package.
Putin had talks with Lukashenko on Thursday night after a
meeting of heads of governments of EurAsEC, a regional
economic grouping established by some ex-Soviet republics.
But officials said the two leaders would not talk to the
press after the meeting, which took place behind closed
Talks are under way with Belarus over a potential $3.0
billion to $3.5 billion loan over three years from an
anti-crisis fund run by EurAsEC. Kudrin said the final
decision on the loan could be made on June 4.
The currency crisis in Belarus, which runs a Soviet-style
economy with many vital sectors under state control, is
eroding Belarussians' ruble savings and causing a shortage of
imported goods such as medicines. [ID:nLDE74H1KR]
It appears to be pushing Belarus, whose leader is on poor
terms with the European Union over a crackdown on the
opposition, more toward Russia even though Lukashenko has had
uneven relations, too, with Moscow over the years.
DIFFERENT EXCHANGE RATES
A multi-level exchange rate system is operating in the
country with an official rate of 3,120 per dollar, the level
at which exporters must sell 30 percent of their foreign
currency revenues to the central bank.
Apart from the interbank rate, there is also a separate
rate at which ordinary Belarussians can buy dollars at cash
points -- though in practice the crisis means the supply of
dollars at these outlets has all but dried up.
Interbank trading remained thin on Thursday, reflecting
uncertainty over the ruble's future ahead of the Putin visit,
the market sources said.
"The quotes are in a spread from 8,000 to 9,000 per
dollar. There is practically no trading going on," one source
"Everyone is waiting for the decisions which will be
announced today," another source said.
Belarus has said it might also turn to the International
Monetary Fund for help, though it is not clear if a formal
approach has been made yet.
Lukashenko's chances of receiving IMF aid may have been
hurt by Western outrage over the arrests of opposition
activists, including politicians who ran against him in his
re-election last December.
Despite regarding Lukashenko as an eccentric and
unpredictable ally, Moscow has subsidised Belarus's
Soviet-style economy in exchange for it delivering Russian oil
to Europe without problem.
With Belarus now in crisis, Moscow, in return for loans,
will have its eye on valuable assets that Minsk may now be
under pressure to privatise -- including oil refineries, the
gas pipeline system, its main mobile phone provider and its
potash production complex.
(Writing by Richard Balmforth amd Olzhas Auyezov; Editing by