Lithuania to avoid IMF loans

  • 2011-10-20
  • From wire reports

VILNIUS - Lithuania will not have to borrow from the International Monetary Fund (IMF), the prime minister and the finance minister have said, in response to an MP’s statement that Lithuania may have to address the IMF, reports ELTA. Lithuania will borrow on international markets, but not from the IMF, Andrius Kubilius said. “Next year, Lithuania will have to borrow. If markets hopefully offer reasonable interest rates, we will borrow,” Kubilius said after a special Cabinet meeting on Oct. 13.
“I do not understand why one should ask whether Lithuania will really borrow from the IMF, as if somebody said that Lithuania intends to do that. (...) Mr. Glaveckas could have met with various people and speak various things, and it is not my business to comment on his meetings and talks. I can repeat the same thing I said today: we are members of the IMF. Lithuania and all other member states can turn to the IMF if necessary. There has been no address to the IMF that we could discuss now,” Finance Minister Ingrida Simonyte said.

MP Kestutis Glaveckas, head of the Seimas Committee on Finance and Budget, said last week that Lithuania is likely to turn to the IMF for a loan to refinance the interest and maintain the budget balance. Lithuania’s debt servicing is estimated to total 2 billion litas (579 million euros) next year.
Simonyte said that the government would consider turning to the International Monetary Fund if declines on global financial markets worsen.

IMF assistance has become “less sensitive politically’ than in 2009, as the Washington-based lender can now provide “more instruments than just a standby agreement,” including credit lines and insurance, Simonyte said. Lithuania is not considering approaching the IMF at present, she added.

“We cannot say we would rule out assistance from the IMF should such a need occur and uncertainty on international markets continues,” she said at a conference in Vilnius. Europe’s sovereign debt crisis and a weaker global economy have roiled markets, prompting investors to sell stocks and bonds in emerging nations. Officials should consider IMF loans next year as they offer lower rates than the market, Stasys Kropas, head of the country’s Banking Association, said at the same conference.