Belarus appeals to IMF for rescue loan

[June 01, 2011]  MINSK, Belarus (AP) -- Belarus has asked the International Monetary Fund for a loan to help stabilize its plummeting economy, the government said Wednesday as it struggles to manage the country's most severe financial crisis since the Soviet collapse.

There was no indication of the size of the loan the government had asked for, but analysts say at least $9 billion is needed to get the economy back on track.

Panic spread across the country last week, when the National Bank cut the value of the Belarusian ruble against the dollar almost in half. Belarusians have been rushing to buy up goods and lining up for days at currency exchange offices to get dollars and euros in a desperate attempt to protect their savings.

On Wednesday, the government issued a decree freezing prices on staples such as fish, cheese, tea and coffee and some fruit and vegetables.

The IMF, which issued Belarus loans amounting to $3.5 billion in 2009-2010 to help it weather the impact of the global financial crisis, is studying the country's finances and is expected to produce a report in mid-June.

"This is an SOS signal from the Belarusian government, which is losing control of the situation," said Stanislav Bogdankevich, former head of the National Bank.

Observers pin much of the blame for the country's financial woes on authoritarian President Alexander Lukashenko, who oversaw an increase in social spending before his re-election late last year. The IMF cited that as a key drag on the economy.

Belarus is hoping for a $3 billion loan from Russia but the Kremlin has been dragging its feet, insisting that it will lend Minsk money if the country decides to put up for sale some of its key state-owned enterprises.

[Associated Press; By YURAS KARMANAU]

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