ECONOMY

Serbia closer to eliminating debt to the IMF

BELGRADE (Reuters) – Serbia said it has repaid another $250 million tranche of its debt to the International Monetary Fund, cutting its total debt to the lender to below $500 million. In a brief statement, the central bank said the repayment was made last Thursday. Serbia repaid early the first $240 million tranche of its $962 million debt to the IMF in June. The government plans to clear the debt by mid-2007. The repayment schedule for the funds drawn through a 2002-2005 loan deal currently runs until 2010. The early debt servicing is part of the government’s strategy to reduce the nation’s overall debt burden by $2.5 billion to $3.5 billion by the end of 2007. Serbia’s hard currency reserves hit a record high of $10.7 billion in August and total external debt stood at $17.27 billion at the end of June. Its 2005 GDP is estimated to have reached 21.1 billion euros ($26.85 billion). As part of these efforts, Serbia has asked the World Bank to write down a $1.06 billion debt accrued by the breakaway province of Kosovo that is still being serviced by Belgrade. It has also asked the Paris Club of creditors for $1 billion debt relief to upgrade roads, improve environmental protection and reduce poverty.