Belarus should float ruble, freeze salaries: IMF

Minsk, June 14: The International Monetary Fund said Monday Belarus should adopt a free floating exchange rate and freeze salaries to help stabilise the country’s economy, local media reported.

‘We believe that a floating exchange rate is better than a fixed one. The current multitude of exchange rates in Belarus leads to all kinds of economic distortions,’ Xinhua quoted the IMF’s mission chief to Belarus Chris Jarvis as saying.

He also urged Belarus to raise interest rates to the level of inflation, which is expected to hit 39 percent by the end of 2011.

Belarus and the IMF Monday began discussions on a new programme to achieve financial stability.

According to Jarvis, the new program will be designed for three years and will imply a number of major structural changes, the amount of the loan will depend on the balance of payments and other factors.

Meanwhile, Belarusian Prime Minister Mikhail Myasnikovich said Monday Belarus has the right to receive a loan from the International Monetary Fund (IMF).

‘We, as the legal IMF members, have the right for the specific support in difficult times,’ Myasnikovich said during the meeting with the IMF Belarus mission chief Chris Jarvis.

Minsk, which is in the grip of a financial crisis after devaluing its currency by more than 30 percent last month, has applied for a total of $14.5 billion bailout – a $6.5 billion loan from a Russia-led fund and $8 billion credit from the International Monetary Fund.