Belarus Central Bank asks Iran over $400mln loan

The Central Bank of Belarus confirmed on Wednesday that it is in talks with Iran to receive a $400 million loan.Deputy Chairman of the National Bank of Belarus Sergei Dubkov confirmed earlier reports that his country is in talks over a $400 million loan from Iran. However, he refused to announce a timeline for loaning, interest rate and other details of the negotiation process. The same announcement was made by the head of Belarus National Bank, Nadezhda Ermakova, at the meeting of the seventh session of the Council of Belarus on October 3.Minsk is struggling with a financial crisis that has led to a 60 percent devaluation in its ruble currency this year, driving huge rises in prices for staple goods, including food. The Belarusian central bank may conduct currency interventions at an additional trading session this month to prevent a "sharp" jump by the dollar, the Belarusian state news agency BelTA reported, citing chairman Nadezhda Yermakova. In efforts to plug holes in its balance of payments, Belarus has already raised an $800 million in credit from a Russia-led anti-crisis fund and has turned to the International Monetary Fund and Russia's Sberbank for further help. Belarus is seeking a $1 billion loan from Sberbank secured with shares in refiner Naftan, Interfax said. The country may get the second $440 million tranche of its Russia-led bailout loan by the end of October, BelTA said, citing First Deputy Finance Minister Vladimir Amarin. Yermakova said agreement in principle had now been reached with Iran for a credit line. "The issue of about $400 million credit from Iran is being considered. A decision in principle has already been made by the Iranian side," Yermakova was quoted as saying by BelTA on October 3. She gave no details on the terms of the loan or the level of interest payments. Belarus, which faces a high repayment schedule in 2012 and 2013 on old foreign debt, is hoping for up to $7 billion from the IMF under a new arrangement. An IMF mission was in Minsk earlier this month for a review of economic and structural reforms that it has urged the country to take. "The mission will begin its work tomorrow. This work might lead to a discussion of a new program. … Its volume may amount to up to $7 billion," Amarin told journalists a day before the IMF visit. Officials had previously put the amount they could seek from the fund at up to $8 billion.Belarus, which received $3.5 billion from the fund in 2009, requested a new stabilization loan in June. Reaching an understanding on the country's macroeconomic framework with the fund would facilitate a new program of assistance, Natalya Kolyadina, the lender's resident representative in the country, said.