The Executive Board of the International Monetary Fund (IMF) on Wednesday decided, as expected, to approve a new loan for Bosnia and Herzegovina worth slightly more than EUR 550 million.
The IMF confirmed on its Twitter account that at its session in Washington the Executive Board decided to formally approve the payment of EUR 553.3 million over a three-year period.
The loan was approved under the Extended Fund Facility, designed to serve as long-term support to countries that need more time to implement systemic financial and economic reforms.
Bosnia and Herzegovina should start paying back the loan in 2020 and do it over a period of six years with an annual interest rate of just above one percent.
Even before the loan was approved, the Bosnian government on Monday decided to withdraw, by the end of September, the first instalment in the amount of some EUR 78.7 million to be divided between the country's two entities, the Federation of Bosnia and Herzegovina and Republika Srpska.
Most of the money will be used to patch up holes in the entity budgets that are faced with a chronic lack of revenue. In return, the two entities have pledged to reduce public spending, reform their labour markets and consolidate their commercial banking sectors.