IMF to decide today on aid for BiH worth 330 million euros

(Patria) - The International Monetary Fund will consider BiH's request today, April 20, and a decision on the allocation of 330 million euros is expected. BiH is set to receive 330 million euros from the IMF's crisis arrangement to combat the coronavirus pandemic. BiH is one of 90 requests.

An agreement on the distribution of funds was reached at a meeting between the presidents of SNSD, Milorad Dodik, HDZ BiH, Dragan Čović, and SDA, Bakir Izetbegović, following pressure from the international community.
38 percent belongs to Republika Srpska, 62 percent to the Federation of BiH, while both RS and the Federation will give Brčko District half a percent each from the amount they receive.

A coordination body will also be formed at the BiH level, which will decide on further economic measures, as well as oversee the distribution of funds from the IMF.
At the session, attended by all members of the BiH Fiscal Council, a Letter of Intent with the International Monetary Fund (IMF) was agreed upon, through which BiH is seeking financial support within the framework of the rapid financing instrument, as part of efforts to curb the spread of the coronavirus.

Seven members of the BiH Fiscal Council agreed on a Letter of Intent with the International Monetary Fund (IMF), through which BiH is seeking financial support within the framework of the rapid financing instrument, as part of efforts to curb the spread of the coronavirus.

It is important to note that the Letter of Intent also states that there must be no attempts to use the foreign exchange reserves of the Central Bank for fiscal purposes, as this would undermine the currency board, pose a threat to financial stability, and risk significant inflationary trends. 

In other words, this means that, in addition to the economic and humanitarian crises that BiH is currently facing, there would also be a financial and currency crisis. For this reason, if the currency board arrangement is compromised, the IMF will not provide financial assistance to Bosnia and Herzegovina within the Rapid Financing Instrument.