IMF TO APPROVE ARMENIA’S APPLICATION FOR 28-MONTH STAND-BY ARRANGEMENT OF 540 MILLION USD

Noyan Tapan

M arch 4, 2009

YEREVAN, MARCH 4, NOYAN TAPAN. The Managing Director of the IMF
Dominique Strauss-Kahn will recommend that the IMF Executive Board
approve Armenia’s application for a 28-month Stand-By Arrangement
of 540 million USD. In his March 3 announcement, he substantiated
this decision by the fact that in response to the negative impact of
the global financial and economic crisis, the Armenian authorities
developed a viable and reliable economic program for addressing the
problems related to deterioration of Armenia’s external prospects,
restoration of trust in currency and the financial system, and
protection of the poor section of of the population.

According to a press release of the IMF, the Executive Board is
expected to convene a sitting at the end of this week in order to
discuss the program.

After approval, Armenia will be able to receive immediately about
239 million USD.

A comprehensive package of policy was worked out by Armenian
authorities that have consulted with IMF experts. The package envisages
return to a floating exchange rate regime (allowing for the exchange
rate to change in accordance with the fundamental principles of
market in order to protect the economy from external shocks and keep
the foreign currency reserves), a policy supporting the monetary,
tax-budgetary and financial sectors as well as targeted structural
reforms. According to the IMF, Armenian authorities are also taking
measures to neutralize the economic decline and reduce the impact of
the economic crisis on the poor section of the population.

In the words of D. Strauss-Kahn, the resolute measures of Armenian
authorities substantiate the exceptional level (400% of Armenia’s
quota) of accessibility of IFM resources and deserve support of the
international community.