Eurasian Development Bank holds consultations with the authorities of the Republic of Belarus on preparing a new stabilization loan of the EurAsEC Anti-Crisis Fund

02 April 2015

Moscow, 1 April 2015. A team of experts of Eurasian Development Bank (EDB), lead by Director of the Project Group of the Anti-Crisis Fund (ACF) Alisher Mirzoev, visited Minsk on 23-27 March 2015 to hold consultations with the country’s authorities on the Request of the Republic of Belarus received by EDB in March 2015 for an ACF stabilization loan to support the stabilisation programme of the Government and the National Bank of the Republic of Belarus for 2015-2017. During the visit, EDB experts met with First Deputy Prime Minister V. Matyushevsky, Board Chairman of the National Bank P. Kallaur, First Deputy Minister of Finance M. Ermolovich, as well as representatives of international financial institutions and think tanks.

Compression of domestic demand, especially due to the economic recession in the Russian Federation and massive Russian rouble devaluation, has significantly impacted Belarus’ economy, sharpening the structural imbalances accumulated in previous years. The GDP is expected to contract in 2015 by at least 2%, while the inflation will remain at the level of 18-20%. Lower tax and customs revenues, resulting from lower oil prices and deceleration of economic activity in the Republic of Belarus and Eurasian Economic Union member states, can increase the additional financing needs of the budget and the balance of payments of the Republic of Belarus.

In general, EDB, in its capacity of the ACF Resources Manager, welcomes the measures undertaken by the new economic team of Belarus aiming at tightening monetary policies through higher interest rates and transition to a more flexible exchange rate regime in response to the worsening external environment. After the lift of administrative measures introduced to manage the exchange rate and depreciation of the Belarusian rubel at the start of 2015, such policies helped stabilise the situation in the foreign exchange market.

However, the current level of real interest rates is, most likely, very high and their further reduction should depend not only on the rate of projected inflation. In addition to inflation, the current account (CA) deficit is another efficient reference point for interest rate policy decision making in the environment, when the Republic of Belarus maintains significant price controls and the exchange rate has a large impact on the price level. Tightening the fiscal policy by bringing down the volume of lending under Government programmes and its consistency with monetary policy against the background of a flexible exchange rate could facilitate not only an efficient reduction of the CA deficit this year, but also replenishment of the international reserves, stabilisation of the foreign exchange market, reduction of interest rates, and reallocation of credit resources to more efficient projects. The policies of pursuing the internal and external balance, accompanied with lowered price controls, would minimise both the size of the surge in inflation and its negative impacts.

At the same time, the Manager is of the opinion that achieving sustainable economic growth rates in the medium-term perspective would be possible only if the country embarks on a programme of decisive structural reforms involving price and market liberalisation combined with further optimisation of the role of the state in the economy.

The parties have reached an agreement to continue preparation of a Macroeconomic Stabilisation and Structural Reform Programme, which could be supported with an ACF stabilization loan.

Additional Information

Eurasian Development Bank is an international financial institution founded by Russia and Kazakhstan in January 2006 with the mission to facilitate the development of market economies, sustainable economic growth and the expansion of mutual trade and other economic ties in its member states. The member states of the Bank are the Republic of Armenia, the Republic of Belarus, the Republic of Kazakhstan, the Kyrgyz Republic, the Russian Federation, and the Republic of Tajikistan. Read more at

The EurAsEC Anti-Crisis Fund (ACF) amounting to US$8.513 billion was formed on 9 June 2009 by the governments of six countries: Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan. The objectives of the ACF are to assist the member countries in overcoming the consequences of global financial crisis, ensure their economic and financial stability, and foster integration processes in the region. The ACF member countries signed the Fund Management Agreement with Eurasian Development Bank giving it the role of the ACF Resources Manager. Read more at