Increased credit arrangement with the IMF for 92 million KM accepted

The Federal Government, at today's urgent, telephonically held session, adopted the Decision on accepting additional borrowing of the Federation of Bosnia and Herzegovina under the IV Stand by arrangement with the International Monetary Fund in the amount of up to 92,029,544 KM, which amounts to 49% of the total additional funds approved for Bosnia and Herzegovina in the amount of approximately 187,815,396 KM.

The additional loan funds will be used to support the Budget of the Federation in order to mitigate the consequences of the natural disaster and cover the significant loss of revenue in the Budget of the Federation, and to improve medium-term fiscal sustainability, preserve the continuity of the currency board arrangement, while simultaneously adopting policies to address fiscal imbalances, strengthen the financial sector, and implement agreed fiscal reforms.

These additional credit funds are approved under the same conditions as the Stand by arrangement, with a repayment period of five years and a grace period of three years, starting from the date of disbursement of each tranche. Each tranche is repaid in eight equal quarterly installments after the grace period expires. The interest rate is variable and determined by the IMF (currently 1.09 percent annually).

The additional loan funds will be disbursed to the Budget of the Federation within the seventh and eighth tranches after the conclusion of the sixth and seventh reviews of the implementation of the Stand by arrangement measures.