Belarus in talks with Iran over $400 mln loan: central bank

3rd October 2011, Comments 0 comments

Cash-strapped Belarus said on Monday it was negotiating a $400-million (300-million-euro) loan with Iran aimed at shoring up the economy during its worst crisis since post-Soviet independence.

"Belarus and Iran are currently considering the issue of an Iranian loan in the amount of $400 million," National Bank of Belarus head Nadezhda Yermakova told lawmakers.

"A decision in principle to issue this loan has already been reached by the Iranian side," she said without providing further details.

Belarus is grappling with a severe economic downturn that has set off spiralling inflation, sparked a currency devaluation and forced the government to put price caps on key goods.

Yermakova said Belarus was also in talks with Russia's top lender Sberbank over a loan of $1 billion that Belarus was to secure with shares of its prized Naftan oil refinery as collateral.

The Moscow-based bank declined to comment.

The worst economic crisis of strongman Alexander Lukashenko's 17-year rule has forced him to agree to a $7.5-billion privatisation programme that will likely leave most of his most valued assets in Russia's hands.

Minsk is also hoping to secure a $8-billion lifeline from the International Monetary Fund but the global body said it first needed to see a firm commitment to reforms.

This past summer Belarus secured a $3-billion loan from a grouping of ex-Soviet countries led by former sponsor Moscow.

Deputy Finance Minister Vladimir Amarin told reporters on Monday that Minsk was expecting to receive a new, $440 million installment by the end of the month.

The country's economy is unravelling at the same time as Lukashenko faces ostracism from Western countries for his post-election crackdowns on opposition and rights activists.

© 2011 AFP

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