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Cash-Strapped Belarus Seeks Russian Help In Crisis


MOSCOW (Reuters) -- Belarusian President Alyaksandr Lukashenka, seeking extra funds to help his ex-Soviet state ride out the global financial crisis, held talks with traditional ally Russia on October 25.

A delegation from the International Monetary Fund is to arrive in Belarus on October 27 to consider its request for a $2 billion loan, and Lukashenka's government has also been offered a loan for the same sum over two years from Russia.

The Kremlin said in a statement Lukashenka held talks with Russian President Dmitry Medvedev at an official residence outside Moscow which touched on the global financial crisis. It gave no details of any agreement.

Market analysts say Belarus has a total debt of $14 billion. It also faces the prospect of a sharp hike in the amount it pays for imports of Russian gas in 2009.

Belarus's largely state-controlled economy has suffered little in the global crisis and analysts forecast robust growth.

But they say the liquidity crunch means Belarus will struggle to refinance its debt and it lacks the reserves to make debt repayments on its own. A planned Eurobond issue faltered because of the turmoil on world markets.

Belarus's central bank has said it is seeking loans as a "precautionary measure" to ensure problems in neighbouring economies caused by the crisis do not spread to Belarus.
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