BELARUS NEWS AND ANALYSIS

DATE:

01/11/2007

Belarus doubtful to gain adjustment loan from Russia this year - ambassador

MINSK. Nov 1 (Interfax) - The possible issue of an adjustment loan to Belarus this year is doubtful, Russian Ambassador to Belarus Alexander Surikov has said.

"Can the loan be approved by the State Duma? As you know, this State Duma has only one month of office left," the ambassador said. He recommended the Belarusian Finance Ministry be more active.

There are formal grounds for issuing the loan, as Belarus reviewed the national budget in October and a budget deficit formed, the ambassador said.

The sole purpose of adjustment loans is economic stabilization in certain circumstances, among them a budget deficit, he said. Meanwhile, a trade or gas loan can be issued by Russian banks on commercial terms, he said.

Belarus still hopes to gain a $1 billion adjustment loan from Russia in 2007, Belarusian Finance Minister Nikolai Korbut said earlier. "We asked for $1 billion this year and another $500 million next year. The amount has been coordinated with the Russian Finance Ministry," he said.

Belarus was forced to borrow money from the West, Japan and China, as Russia had not supplied it with the adjustment loan, President Alexander Lukashenko said.

The adjustment loan rate will depend on the LIBOR (London Interbank Offered Rate) rate.

The Belarusian government is seeking the adjustment loan of $1.5 billion for stabilizing the balance of payments. The deficit of current accounts is increasing because Russian gas prices have nearly doubled and crude delivery terms have tightened abruptly. Belarusian oil refineries have turned unprofitable.

Source:

http://www.interfax.com/3/330807/news.aspx