Russia to send Belarus the first billion dollar loan by the end of the year


MOSCOW (Reuters) – Russia will send Belarus the first $1 billion tranche of a $1.5 billion loan by the end of the year and provide the rest of the loan in 2021, said Russian Finance Minister Anton Siluanov on Wednesday.

FILE PHOTO: Russian President Vladimir Putin attends a meeting with his Belarusian counterpart Alexander Lukashenko in Sochi, Russia September 14, 2020, in this still image taken from video. Russian Presidential Executive Office/Handout via REUTERS

The loan in Russian rubles and US dollars is the latest in a series of support measures taken by Moscow to its former Soviet ally, Belarus, led by President Alexander Lukashenko for 26 years.

Mass protests have dogged Lukashenko since he claimed victory in the August 9 election which the opposition says was rigged, an allegation Lukashenko denies.

The protests have sparked large withdrawals and increased demand for foreign currency, pushing the Belarusian ruble to historic lows and forcing the central bank to burn $1.4 billion – a fifth of its reserves – to prop up the currency .

Belarus was due to repay Russia $1 billion this year, Lukashenko told state news agency Belta on Wednesday, and he was ready to repay it “despite all the difficulties”. He asked Russia to postpone repayment until next year… “It was a matter of refinancing,” Belta said, quoting Lukashenko.

By providing Minsk with a $1.5 billion lifeline, Moscow would stabilize “our partner’s” finances, Finance Minister Siluanov told reporters.

He said the terms of the final loan were yet to be finalized but were likely to carry a 10-year maturity, supporting Minsk’s finances amid nearly $1 billion outflows last month .

About half of the Belarusian state’s total external debt of $18 billion lies with Russia, according to Sofia Donets, chief economist at Renaissance Capital in Moscow.

While no data was yet available for deposit dynamics in September, recent central bank statements and money market indicators “suggest that liquidity stress in the banking system has eased,” it said. rating agency Moody’s this week.

“Yet, given the political unrest in Belarus, depositor confidence is fragile and outflows are likely to intensify again,” Moody’s said.

Russia had already asked its state banks to continue providing liquidity to its Belarusian counterparts, sources told Reuters, and this week began joint military exercises near the Belarusian border with Poland.

Reporting by Darya Korsunskaya and Andrey Ostroukh; Written by Gabrielle Tétrault-Farber and Katya Golubkova; Editing by Catherine Evans and Grant McCool

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