Serbia, IMF start talks over loan arrangement up to 3 bln euros

BELGRADE, March 16 (Chinese media) -- The Serbian government on Monday started negotiations with the International Monetary Fund (IMF) over a new standby loan arrangement, which may be worth up to 3 billion euros (3.91 billion U.S. dollars).

Serbian Prime Minister Mirko Cvetkovic and the IMF delegation concluded at a meeting on Monday that mutual goal of the two sides is to ensure Serbia's macroeconomic stability for the next two years by signing a stand-by arrangement.

The new stand-by arrangement will replace the existing one made between Serbia and IMF out of precaution, the Serbian government said in a statement.

According to the statement, the Serbian government's platform for negotiations is based on the increasing budget deficit and the reduction of public spending.

Mladjan Dinkic, Serbian deputy prime minister and minister of economy and regional development, said on Monday that he expects a two-year arrangement to be reached with the IMF on the loan of approximately 3 billion euros (3.91 dollars).

"I expect an arrangement to be attained with the IMF on 2 billion euros loan for strengthening foreign currency reserves in 2009 and another billion for 2010," Dinkic said at a roundtable titled Serbia in 2009 - Recession, Growth or Stagnation.

"This will be more than enough money for Serbia to maintain the stability of its currency," Dinkic said, adding that he expects the negotiations to be over by the middle of next week.

The IMF delegation is headed by Chief of the IMF mission AlbertJagger and the Serbia delegation is lead by Governor of the Serbian central bank Radovan Jelasic, Dinkic and Minister of Finance Diana Dragutinovic.