IMF Will Cancel Loan Deal if March Deadline Is Breached

If politicians fail to reach a consensus on fulfilling actions they committed to in a letter of intent submitted to the IMF last year, the lender will cancel the arrangement with the country, Nezavisne daily quoted the finance minister of Republika Srpska entity, Zoran Tegeltija, as saying. If that case, Bosnia will have to open negotiations with the IMF on concluding a new arrangement, Tegeltija added.

 

Earlier this month, the IMF said it has delayed the release of the second loan tranche under its funding arrangement with Bosnia because the country’s authorities have failed to meet reform targets.

“We cannot expect the formal completion of the first review in February because there are delays in the completion of prior actions”, Francisco Parodi, the resident representative of the IMF in Bosnia, told SeeNews.

“We are waiting for them to be completed for the IMF staff to recommend (Executive) Board approval of the first review,” Parodi noted.

In September last year, the IMF approved a three-year 553.3 million euro loan to Bosnia and Herzegovina to support the country’s economic reform agenda. The Executive Board’s decision enabled an immediate disbursement of about 79.2 million euro, while the remainder was said to be made available in 11 installments subject to quarterly reviews.

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