WASHINGTON, Oct 21 (Reuters) - The International Monetary Fund on Wednesday approved its second performance review of Belarus’s $3.63 billion loan arrangement, allowing the country to draw down $699.5 million of the loan.
IMF Deputy Managing Director Takatoshi Kato said the country had made “good progress” in adjusting its policies to weather the global financial crisis and downturn. Belarus has already received $2.23 billion of the IMF funds.
“Exchange rate adjustment has helped reduce external vulnerabilities, with the present exchange regime providing a buffer against external shocks,” Kato said.
“The adjustment has been supported by a tight fiscal policy, with revenue shortfalls offset by spending cuts, and by an interest rate policy that has kept market rates high in real terms,” he added.
Kato said the authorities were committed to tight credit policy to cut the current account deficit and pressure on international reserves. A decision to limit lending under government programs in 2009 will help contain domestic demand and stabilize the economy, he added.
Reporting by Lesley Wroughton; Editing by Diane Craft