March 17, 2020 / 7:23 PM / 13 days ago

IMF mulling $181 million loan to Bosnia for coronavirus fight

SARAJEVO (Reuters) - The International Monetary Fund (IMF) said on Tuesday it may extend a 165 million euros ($181 million) loan to Bosnia to soften the blow to its healthcare and economy from the spread of coronavirus.

“The IMF is exploring the possibility of providing emergency assistance to Bosnia under a Rapid Financing Instrument (RFI),” the IMF Resident Representative in Bosnia, Andrew Jewell, told Reuters.

The RFI is part of the $50 billion in resources the Washington-based global lender has said it would offer to help poor and middle-income countries with weak health systems respond to the coronavirus pandemic. [L1N2AX0RX]

Jewell said that under the RFI, the maximum amount of financing available now would be 50% of Bosnia’s quota or around 165 million euros, and that the financing would not be subject to ex-post conditionality or periodic reviews.

In 2016 the IMF approved a three-year, 553-million-euro aid programme to Bosnia, which was repeatedly withheld over the authorities’ failure to pursue agreed reforms before being extended for a year, and it will expire in September.

“We anticipate that an RFI could be approved by the IMF’s Executive Board by May,” Jewell said.

Bosnian Prime Minister Zoran Tegeltija, who met Jewell on Tuesday to request assistance from the IMF, said the funds would be used to finance the increasing costs sustained by Bosnia’s health system in combating the virus.

He said in a statement the money would also aid Bosnian businesses already suffering badly from multiple closures of European borders to help contain the spread of coronavirus.

Bosnia on Tuesday declared a nationwide state of emergency over coronavirus, after its two autonomous regions - the Bosniak-Croat Federation and the Serb Republic - separately declared emergency situations on Monday and introduced measures to limit transmission of the disease.

Bosnia has reported 27 cases of coronavirus as of Tuesday, with no known deaths so far.

Reporting by Daria Sito-Sucic; Editing by Mark Heinrich

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