Surprising? Belarus resorts to Russia for $600 mln loan

Belarus has asked Russia for a loan to refinance its $600 mln debt. The Kremlin has not taken an ultimate decision yet, the Belarusian Finance Minister said on Wednesday.

“We stay in touch with our colleagues from the Russian Federation as part of the work on the draft credit agreement but the Russian Federation government has not made the decision to grant the loan or not yet. We are talking about refinancing the entire sum of the payments on Russian government loans in 2019. The volume of these payments stands at $600 mln,” Maksim Yermalovich told state-run news agency BelTA.

It is surprising that Belarus is seeking financial help from Russia, economist Dzmitry Kruk said when reached by Belsat TV.

“The fact that they are asking Russia is quite unexpected. At the beginning of the year, there were reports that China was highly likely to provide refinancing. As I see it, the activity on the placement of bonds in China has been suspended. Their applying for a loan was planned, it was announced that the refinancing was to cover about 60-70% of what we owe. So, the question is which side will be the source,” he said.

According to Russian officials, lending to Belarus totalled to $ 6.5 bn, excluding loans for the construction of the nuclear power plant in Astravets.

In late December, Stanislau Bahdankevich, a Belarusian economist and former chairman of the National Bank, reminded in an interview with that Belarus would face large payments on foreign and domestic debts in 2019.

“If we are given loans (by Russia for example), and we will repay the old ones with new loans, then the rate can be stable. And if difficulties arise due to the problems that are brewing with Russia, and Russia does not finance us, does not give new loans to pay off the old ones, then a significant devaluation of the national currency is possible,” he said.

In 2019, the government debt payments will amount to more than 8.5 bn rubles, a third of it will go to covering for the internal debt, another third – for Russian loans. This year, Belarus has to repay almost 1.5 bn rubles to China, another billion – to the Russia-controlled Eurasian Bank of Stabilization and Development.

Russian loans constitute major part of foreign loan repayments in Belarus

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