Minsk signs $2-billion loan deal with VTB Bank

VTB Bank and the Belarusian Council of Ministers on Thursday signed an agreement whereby the former is to provide a $2-billion short-term loan to Minsk, said the Russian bank's press office.

"The VTB Group has been working in Belarus for the eighth year and providing various investment and banking services to the country," said VTB Bank Chairman Andrei Kostin. "We are happy with our results. I'm certain that cooperation between VTB Bank and the Republic of Belarus will be of a successful and mutually beneficial nature in the future."

Earlier that day, Deputy Finance Minister Maksim Yermalovich said that Minsk expected the money to arrive later this week. He noted that the country had to pay some $1 billion to its creditors in June.

Syarhey Rumas, head of the Development Bank of Belarus, announced on May 30 that the Russian government had ordered VTB Bank to issue a $1-billion bridge loan to Belarus in June. However, Belarus now hopes that the loan will be increased to $2 billion, he added.

Mr. Kostin noted on June 20 that VTB Bank's loans for Belarus would be paid off as soon as the Russian government provided an interstate loan. "So we are talking about a rather short-term bridge loan for the period until this September," he stressed.

As Russian Ambassador Aleksandr Surikov told reporters in Minsk earlier this month, Russia may provide a $2-billion government loan to Belarus in July or August. According to Mr. Surikov, the decision to grant such a loan to Belarus was made as far back as the end of 2013, and Vladimir Putin and Alyaksandr Lukashenka discussed the issue in May.

According to Mr. Lukashenka, the $2-billion loan will be used to replenish Belarus’ gold and foreign exchange reserves, which shrank by almost 20 percent in the first few months of 2014. //BelaPAN