IMF loan initial transfer disbursed this week

PanARMENIAN.Net - A new IMF crisis relief program was launched in Armenia, IMF Resident Representative in Armenia Ms. Nienke Oomes said at a meeting with students of Yerevan State University.



The International Monetary Fund approved a $540 mln Stand-By-Arrangement for 28 months. First $240 mln was disbursed this week. Remaining $300 will be disbursed in 8 quarterly installments, subject to good performance.



The interest rate: first $270 mln at 1.56%, second $135 mln at 2.56%, third $135 mln at 3.56%.



The loan has 5 year maturity including 3 years of grace period.



The Armenian government obliged to undertake the following measure under the IMF program: return to a flexible exchange rate regime, strengthen the financial sector to maintain stability, target a fiscal deficit of around 3%, while protecting social spending and public investment.



The program allows for an increase in social spending by 0.3% of GDP to protect the poor. If additional external financing becomes available becomes, the program allows for a $200 mln increase in public investment and SME lending, bringing the deficit to around 5%.