Too early to discuss new EurAsEC ACF stabilization loan for Belarus - EDB
MINSK. Aug 29 (Interfax) - The Eurasian Development Bank (EDB), which manages the monetary resources in the EurAsEC Anti-Crisis Fund (ACF), considers it too early to discuss a new ACF loan program for Belarus, the EDB said in a statement, citing its Deputy Chairman Sergei Shatalov.
"First we need to analyze the results of the current stabilization program, which started in 2011 and isn't finished yet. It's too early to make conclusions. We need to see how the situation develops in the third and fourth quarters," Shatalov is quoted as saying in the statement.
Under the existing program, the ACF still has to transfer the last and sixth tranche of the stabilization credit to Belarus. If Belarus meets the benchmarks established by the program, it should get that tranche by the end of this year, he said.
"Besides evaluating the fulfillment of the benchmarks for the sixth tranche, we'll also need to undertake a comprehensive assessment of the stabilization program's results as a whole, in close cooperation with the Belarusian government and national bank," Shatalov said.
The measures that the government and national bank adopted and which are supported by the current ACF program have had obvious positive results. The exchange rate has been unified, emission lending with the use of national bank resources has been terminated, and concessional lending through government programs has been reduced substantially. These measures, together with improved conditions in energy resource trading and favorable foreign economic dynamics, were the key drivers behind the economy's recovery from the 2011 balance of payments crisis and the containment of inflation, Shatalov said.
The ACF credit helped Belarus establish a basis for further economic stabilization. However, that stabilization is not yet finished and needs to be continued, as it is vital for the completion of the key challenges that Belarus faces. Among these challenges are structural reforms and industrial modernization, which will raise the competitiveness of Belarusian companies on foreign markets, Shatalov said.
The EDB's deputy chairman expressed concern that despite an overall stable situation in the Belarusian economy, the country continues to actively hand out loans for state programs.
"It's a cause for concern that various forms of lending for state programs still remain significant. Of course, the amount of concessionary lending under state programs is substantially lower now than it was in the first half of 2011, before the ACF stabilization program started. We welcome that because once these operations are excessive, they will imply higher inflation and a weakened balance of payments," Shatalov said.
However, Belarus needs to further reduce the quantity of "directed lending," he said.
"The main issue right now is what is the optimal level of lending for the economy as a whole - not only for state programs, but also via market channels," he said.
