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Serbia to negotiate new IMF loan

Serbia to negotiate new IMF loan

An International Monetary Fund mission will arrive in Serbia next week for talks on a new $2 billion loan sought by the country to weather the global financial crisis, the National Bank governor said Thursday.
Radovan Jelasic said the new standby loan deal is crucial for Serbia's hopes of getting additional funds from other international creditors _ such as the World Bank and the European Union.
The IMF's executive board approved a $530 million standby loan in January to help Serbia cope with the downturn, but the country said it needs more.
"The new arrangement with the IMF is worth much more than two billion dollars," Jelasic told Belgrade's B-92 radio. "It would mean that Serbia has the backing of prominent international institutions."
He said a new two-year standby loan would mean that the country's economy cannot go bankrupt, as some economists fear, and that the Serbian currency, the dinar, will stabilize on the exchange market.
The dinar has lost more than 25 percent of its value since the financial meltdown began to effect foreign investments in late 2008.
The budget deficit in 2009 is expected to be three percent of gross domestic product, twice the 1.5 percent originally agreed with the IMF.
Economic growth, forecast at 6.0 percent before the crisis, has been slashed to between 0.5 and 1.0 percent for 2009, while inflation is expected to surpass the targeted 8.0 percent.
Jelasic said the IMF mission will arrive in Belgrade next Monday for negotiations which are expected to last for at least 10 days.


Updated : 2021-10-20 08:58 GMT+08:00