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Serbia Seeks Precautionary Loan from IMF
Tirana, Nov. 18, (AENews) - The International Monetary Fund and the government of Serbia reached a preliminary agreement on Monday to build a USD 518 million precautionary fund to support the external balance of Serbian economy, – IMF announced today.
Serbia is the first country in the Balkans after Hungary to ask for such support from IMF. Serbia suffered serious problems during last few weeks due to the International Financial Crisis. Its currency , the Serbian Dinar, deprecated against the Euro and the US dollars despite several attempts from the SerbianCentral Bank to halt the fall of Dinar by pumping euros in the open market.
On Monday, IMF staff mission in Belgrade, reached and agreement with the Government of Serbia, but the agreement should be approved by IMF Management and the Executive Board, before becoming effective.
“The global financial turmoil has begun to spill over to Serbia, and this abrupt shift in the international environment is likely to slow down credit flows and economic activity across the region,” said IMF Managing Director Dominique Strauss-Kahn. “While the banking sector’s capital and liquidity buffers are substantial and should help weather the financial headwinds, strong policies will be important to maintain investor and market confidence.”
The IMF said that in view of Serbia’s comfortable international reserve position and continued access to external financing, the arrangement is being considered under regular, not exceptional, procedures and access limits. The Serbian authorities do not intend to draw on the resources made available under the 15-month Stand-By Arrangement unless the need arises.
The IMF has already announced loan agreements of $15.7 billion for Hungary and $16.4 billion for Ukraine as part of efforts to counter the impact of global financial turmoil on emerging markets in Eastern Europe.
