BELARUS NEWS AND ANALYSIS

DATE:

24/01/2009

Russia says "not considering" $3 bln loan to Belarus

MOSCOW, Jan 24 (Reuters) - Russia is not interested in lending Belarus 100 billion roubles ($3.05 billion) as part of a move to carry out bilateral trade in roubles, Deputy Finance Minister Dmitry Pankin said late on Friday.

Interfax news agency earlier this week quoted a Belarussian source as saying Belarus had asked Russia for a 100 billion rouble loan as a pre-condition for switching to Russian roubles in bilateral trade.

That would be in addition to a $2 billion stabilisation loan from Russia agreed by the two countries last year. Russia is Belarus' largest trading partner.

Asked about the request from Belarus for the new loan, Pankin told reporters in a briefing: "They had the figure of 100 billion (roubles) in the letter -- we are not considering it."

The comments were embargoed for release on Saturday.

Russia is seeking to turn its rouble into a regional reserve currency as one way of combatting volatility brought on by its dependence on world oil prices and, as a result, the dollar.

Belarus, which accounts for almost 5 percent of Russian exports, devalued its rouble by 20 percent on Jan. 1, partly to meet IMF conditions set on a $2.5 billion loan and also to catch up with a slide for the Russian rouble.

Earlier the Belarussian central bank switched to the dollar peg from a previous Russian rouble link. It has talked of fixing the domestic currency to a basket of the dollar, euro and the Russian rouble some time this year.

The source told Interfax Belarus needed the Russian loan to have enough roubles inside the country to guarantee timely payments for Russian imports. The source said only a small part of the $3.6 billion forex reserves was kept in roubles.

Discussions over a monetary union between Russia and Belarus began in Sept. 1993, shortly after the break-up of the rouble zone. But talks stalled as Russian reforms advanced and Belarus' economy stayed along Soviet-era command lines. (Reporting by Denis Dyomkin, writing by Gleb Bryanski; editing by Patrick Graham)

Source:

http://www.guardian.co.uk/business/feedarticle/8317771

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