Armenian parliament is considering ratification of $315 million loan agreement with IMF

24.06.2020 17:16
Armenian parliament is considering ratification of $315 million loan agreement with IMF

YEREVAN, June 24. /ARKA/. An emergency session of the Armenian parliament discussed today ratification of an agreement with the IMF regarding the use of the $280 million loan, allocated to Armenia in May 2019, and attraction of an additional loan in the amount of $35 million. The money is to help Armenia fight the coronavirus outbreak and mitigate its economic consequences.

Deputy Minister of Finance Armen Hayrapetyan said the coronavirus pandemic has been affecting Armenian government's revenue collection rate. To mitigate the pandemic's consequences the government decided to allocate 150 billion drams ($315 million) to finance a wide range of coronavirus-related compensatory measures, including cash payments to a large part of the population, financial assistance to businesses and loan subsidies for farmers.

“On the one hand, a shortfall in the tax revenues, on the other hand, an increase in social assistance spending led to a financial gap of 250-260 billion drams," Hayrapetyan said.

He said the $280 million loan, which was allocated to Armenia by IMF in May 2019 has not been used until now, 'but now we can use the money as the need has arisen."

He said after the ratification of the agreement, the money will be transferred to the treasury account and can be used. The remaining $35 million will be available in September.

He said the loan is provided at the rate of 1.3%, which is significantly lower than the current rates.

The Armenian authorities say the emergency borrowing is justified even though it will lead to a sizable increase in the country's foreign debt. -0-

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