EMERGENCY LOAN PROGRAMMES IN PAST SIX MONTHS
Kyiv Post
Feb 20 2009
Ukraine
(Reuters) – Following are details of the main emergency loan programmes
initiated by International Monetary Fund (IMF) over the past six
months as the global economic crisis has deepened.
In the latest development, Serbia said on Friday it expected to
conclude a 2 billion euro ($2.52 billion) loan with the IMF by April.
Below are details of some of IMF’s lending packages:
* ARMENIA — The IMF approved a three-year, $13.6 million loan
programme in November to support Armenia’s economy through to
2011. Armenia is also negotiating with other international lenders to
secure a stabilisation loan worth a total of $525 million to support
Armenian businesses hurt by the crisis.
* BELARUS — IMF approved a $2.46 billion financial rescue package for
Belarus on Jan. 12, 2009. Belarus has already received the first $788
million tranche and the rest is to be released over the next 14 months.
* EL SALVADOR — IMF gave final approval to an $800 million loan
for El Salvador on Jan. 16, 2009, but said the country did not face
immediate balance of payments needs and would not draw on the funds.
* HUNGARY — The IMF, the EU and World Bank agreed a $25.1 billion
economic rescue package for Hungary last November in the biggest loan
for an emerging market economy since the global crisis began.
— Hungary turned to the IMF after its big budget deficit and heavy
dependence on foreign borrowing spooked investors when the global
crisis intensified, sparking a run on its forint currency.
— The IMF’s conditions forced the government to make additional
spending cuts, including in social spending and public sector wages,
which had been regarded as taboo so far.
* ICELAND — IMF approved a $2.1 billion loan for Iceland on Nov. 19,
2008 after weeks of delays due to wrangling between Iceland and some
European nations. Iceland’s major banks and currency had collapsed
under the weight of billions of dollars of debt accumulated in an
aggressive overseas expansion into financial services.
— The IMF deal was complemented by more than $3 billion in loans from
Nordic countries, Russia and Poland as well as close to $5 billion
or more by Britain, the Netherlands and Germany, making the whole
package worth about $10 billion.
— Analysts have praised the new coalition government under Johanna
Sigurdardottir — the previous centre-right coaltion under Geir Haarde
became the first to fall as a direct result of the global crisis —
for sticking to the programme agreed with the IMF, but also noted
that it effectively tied the coalition’s hands.
* LATVIA — The four-party coalition government collapsed on Friday
and the prime minister stepped down adding to the country’s economic
problems. The country had to take a 7.5 billion euro ($9.43 billion)
IMF-led rescue loan in 2008.The 7.5 billion euro package included
financing from the EU, Nordic countries, the Czech Republic, Poland,
fellow Baltic state Estonia and the World Bank. The IMF share was
1.68 billion euro.
* MALAWI — The IMF said on Dec. 3, 2008 it approved a $77.1 million
to help Malawi reduce the impact of high fuel and fertilizer costs.
— The IMF estimated that higher global prices of oil, fertilizers
and other imported goods in 2008 cut Malawi’s trade balance by about
$156 million.
* PAKISTAN — Will look to secure additional funding from IMF when
they hold talks in April. The IMF approved of a loan of $7.6 billion
on Nov. 24, 2008 to avert a balance of payments crisis and prevent
the government defaulting on its international debt obligations.
— Pakistan got immediate access to the $3.1 billion under the 23-month
facility with the rest to be phased in subject to quarterly review.
* SERBIA — Expects to conclude a 2 billion euro ($2.52 billion)
loan with IMF by April as it looks to renegotiate a new stand-by
loan. IMF already approved a 402.5 million euro ($530.3 million)
loan on Jan 16, 2009.
— The terms of the agreement require that Serbia cut its budget
deficit to 1.75 percent of GDP in 2009, from 2.7 percent in 2008.
* SEYCHELLES — IMF agreed a two-year $26 million rescue package on
Nov. 14, 2008 for the Seychelles, whose foreign debt was valued at
$800 million. Initially the country will receive $9.1 million.
— The package is dependent on economic reforms.
* TURKEY — Has been locked in negotiations with the IMF on a loan
deal to reinforce state finances, but talks were suspended last month
after the two sides failed to resolve their differences. The IMF had
opposed tax cut plans in Turkey in the past, saying this would hurt
fragile public finances. Markets expected a deal around $25 billion,
which would make it the biggest loan request in Turkey’s history.
* UKRAINE — The IMF approved a $16.5 billion loan package on Nov. 6,
2008 to help Ukraine withstand the financial crisis. The budget deficit
is at the centre of unresolved talks with the IMF as the central bank
is running out of the first $4.5 billion IMF tranche as it intervenes
on the interbank market to prop the currency up and keep to an IMF-set
reserves floor. An IMF mission left Kiev last week without disbursing
the second $1.84 billion tranche of a $16.4 billion loan.