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25 Oct, 2008 07:38

Russia lends Belarus $US 2 billion

Belarusian President Lukashenko is in Moscow seeking Russian expertise on how to get through the financial crisis. Russia has agreed to lend its neighbour $US 2 billion to cope with money problems, including covering expenses on Russian gas.

“We are very dependent on Russia in economic issues. Half of the Belarusian foreign currency reserves are kept in Russian roubles. We deliberately stopped using dollars and switched to roubles,” Lukashenko said.

Belarus is currently paying $US 129 for 1,000 cubic metres of gas and the prices have gone up several times during the past two years. It even resulted in several diplomatic spats between Russia and Belarus. And some predict that the price will certainly increase by the end of 2008 or in 2009.

Russian Finance Minister Aleksey Kudrin said the money will be transferred in two payments of $US 1 billion each, but the credit conditions are still being discussed.

Dmitry Medvedev and his counterpart are also expected to discuss various bilateral issues, including common air defence.