Page last updated at 13:43 GMT, Thursday, 26 March 2009

Serbia secures IMF emergency loan

Serbian flag
Serbia will use the 3bn euros to strengthen its reserves

The International Monetary Fund (IMF) has agreed to lend Serbia 3bn euros (£2.8bn; $4.1bn) to help it through the economic downturn.

The money will be used primarily to strengthen the country's hard currency reserves and stabilise the local currency, the Serbian dinar.

The IMF said the loan was likely to be approved officially in May once Serbia complied with certain conditions.

On Wednesday, the IMF and other lenders agreed to loan Romania 20bn euros.

'Necessary conditions'

"An IMF staff mission and Serbian authorities have today reached an agreement subject to approval by the IMF management and executive board," a statement said.

"The enhanced arrangement would envisage a loan of around 3bn euros," it added.

Albert Jaeger, head of the IMF mission, said Serbia's GDP was likely to contract by 2% this year and remain flat in 2010.

"Under the agreement, in the next few weeks, the [Serbian] authorities have to take a series of measures including the revising of the budget and proposing legislative changes necessary for its implementation," he said.

"If these conditions are satisfactorily fulfilled, the arrangement could be submitted to the board of the IMF in early May," he added.

The 27-month deal replaces a 520m-euro loan agreed with the IMF earlier this year.

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