News / Europe

Belarus Asks IMF for Rescue Loan of Up to $8 Billion

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Belarus is requesting a new economic rescue loan from the International Monetary Fund (IMF) to help it cope with a deepening financial crisis.

Belarusian Prime Minister Mikhail Myasnikovich said Wednesday the government has asked for an IMF loan between $3.5 billion and $8 billion for the next three to five years.

Belarus last received an IMF loan of $3.5 billion for 2009 and 2010, when the global financial crisis was hurting its Soviet-style economy. Since then, the country's economic situation has worsened, with rising inflation and panic buying of consumer goods.

President Alexander Lukashenko's government has taken several steps to deal with the crisis in recent days.  It froze prices of some basic foods Tuesday, saying the controls would remain in place until July 1.

Minsk also devalued the Belarusian ruble by more than a third last week.  Many Belarusians have since been lining up at currency exchange offices, hoping to protect their savings by converting their rubles into euros or dollars.

It is not clear what conditions the IMF may impose on any new loans to Belarus.  Some analysts say Lukashenko is running out of options to keep the economy afloat.

Belarus has asked its traditional ally Russia for a direct loan, but Moscow has resisted, saying it may agree to fund a joint bailout package with other former Soviet republics by the end of this week.

Moscow has said that in return for any bailout, Minsk must sell off key state assets, a move that could enable Russian companies to take over large parts of the Belarusian economy.  Lukashenko has expressed reluctance to sell his country's most important enterprises at the prices suggested by Russia.

The crisis is one of the most serious Lukashenko has faced in his nearly 17-year rule.  His government also is under sanctions from the European Union and the United States, which have criticized him for cracking down on the opposition after his disputed re-election last December.

Some information for this report was provided by AP, AFP and Reuters.

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