330 Million Euros from IMF will be used for Health Sector and Financing of Economic Stabilization Measures

June 5, 2020 9:30 AM

 

 

 

The Central Bank of Bosnia and Herzegovina (CBBH) received the Decision of the Council of Ministers of Bosnia and Herzegovina on the allocation of funds of the Rapid Financing Instruments (RFI) from the International Monetary Fund (IMF).

This created the conditions for the distribution and remittance of approximately 648 million convertible marks to the sub-accounts of the Ministry of Finance of the Federation of Bosnia and Herzegovina, the Ministry of Finance of Republika Srpska and the Brčko District.

The funds will be allocated on the basis of the Decision, i.e. the Instruction on the allocation of funds of the Ministry of Finance and Treasury of Bosnia and Herzegovina, as follows: 61.5 % for the Federation of Bosnia and Herzegovina with its 10 cantons; 37.5 % for Republic of Srpska and 1 % for the Brčko District of Bosnia and Herzegovina.

Debt repayment is performed by the Entities and the Brčko District of Bosnia and Herzegovina in accordance with the legal regulations, stipulating the settlement of liabilities towards international financial institutions according to the established repayment plans.

The current interest rate is based on 1.05 percent with a grace period of 39 months. The loan is repaid in eight quarterly annuities.

The Governor of the Central Bank of Bosnia and Herzegovina, Senad Softic, stated that the funds of around 330 million euros of the International Monetary Fund loan intended for the increased needs of the health sector and the financing of economic stabilization measures were paid into the sub-accounts of the ministries finances of the Republika Srpska and the Federation of BiH, and the Brcko District, in the ratio previously agreed.

He said that the funds were paid into the bank accounts according to the instructions of the competent ministries, and that the Federation of BiH, the Republika Srpska and the Brcko District could dispose of those funds, Vijesti.ba news portal reports.

“Finally, this whole story about the IMF funds is over, and I am glad that it happened, because no bank, not even the Central Bank, is interested in having the funds in the account,” Softic said.

The decision on the allocation of funds from the Rapid Financing Instrument (RFI) from the International Monetary Fund (IMF) was unanimously adopted at the session of Council of Ministers of Bosnia and Herzegovina on Tuesday, Bosnian Minister of Finance and Treasury Vjekoslav Bevanda told reporters after the session, Vijesti.ba news portal reports.

He stated that this decision determines the schedule of withdrawn funds of the Rapid Financing Instrument from the IMF in the total amount of 330 million special drawing rights in the equivalent of the convertible mark at the valid exchange rate on the day of withdrawal.

He added that the Ministry of Finance and Treasury will allocate funds from the Rapid Financing Instrument, in accordance with the Decision of the Fiscal Council of BiH, signed Letter of Intent and Memorandum of Understanding in the following proportions – 61.5 percent for the Federation of BiH with its 10 cantons; 37.5 percent for Republika Srpska and one percent for Brcko District of BiH.

Bevanda said that the debt is being repaid by the entities and the Brcko District, in accordance with the legal regulations which regulate the settlement of obligations towards international financial institutions according to the established repayment plans.

“The decision enters into force on the day of its adoption and is published in the Official Gazette. The signatory of this decision will be the chairman of Bosnian Council of Ministers, Zoran Tegeltija,” Bevanda added.

Answering a journalist’s question about how the adopted decision differs from the previous one, he said that this was the third time that the Council of Ministers was trying to make a decision.

“In the article which says that 61.5 percent is for the Federation of BiH with its 10 cantons, in the first decision it was written the same way, without these cantons. Then there was the sub-article that the funds belonging to the Federation will be distributed 50 percent to the Federation and 50 percent to the cantons,” Minister Bevanda explained.

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