Azernews.Az

MINSK – Russian Prime Minister Vladimir Putin is in Minsk for a visit that could result in a bailout loan deal for Belarus, which is battling a crippling economic crisis, Radio Liberty reported.

Putin was due to attend a meeting of leaders of former Soviet states before sitting down with Belarusian leader Alyaksandr Lukashenka to discuss a potential loan.

The two sides have been in talks for weeks, and Lukashenka has high hopes of clinching the badly needed loan deal during Putin's visit.

"Judging by all our negotiations, they [the Russians] are ready to react urgently if necessary," he said shortly after a telephone conversation with Russian President Dmitry Medvedev on Wednesday. "This represents about $3.1 billion, provided we sign the relevant agreements with them."

Russian Finance Minister Aleksei Kudrin echoed his remarks, saying an agreement was close and could be reached on Thursday.

But Kudrin denied the cash would come directly from Russia, which appears intent on weakening Lukashenka after years of subsidizing Belarus's Soviet-style economy in return for political loyalty and the delivery of Russian oil to Europe.

Instead, Kudrin said the $3 billion loan would be issued by the Eurasian Economic Community (Eurasec), a Russia-dominated regional grouping that includes Belarus, Kazakhstan, Kyrgyzstan, and Tajikistan.

He added that the funds would be paid out over a three-year period and not right away, as Lukashenka had hoped.

The crisis stems largely from lavish public spending before a controversial presidential election in December that led to a brutal crackdown on the opposition and further soured relations with the West.

Belarus's Central Bank has responded by lifting exchange-rate controls, which has sent the local currency plummeting.

Officially, the Belarusian ruble's exchange rate remains at roughly 3,000 to the U.S. dollar. On the black market, however, the Belarusian ruble reached a record low today, trading at a reported 8,000 to 9,000 rubles to the dollar at some exchange booths. That means the currency has lost a stunning two-thirds of its value over the past 10 days.