The foreign exchange reserves of Belarus increased by $103.8mn or 1.6% month-on-month to $6.665bn in July, following a 25.2% m/m jump in June, the National Bank of Belarus (NBB) said in a statement on August 7.

In January-July, the country's forex reserves increased by 35.3%, or $1.738bn. The result was mainly attributed to June's placement of $1.4bn worth of dual-tranche US dollar-denominated Eurobonds with five-year and ten-year maturities, as well as the allocation of new tranches from a support loan agreed with the Russia-led Eurasian Fund for Stabilisation and Development (EFSD) in 2016.

The placement of forex-denominated bonds by the NBB, purchase of forex at the Belarusian Currency and Stock Exchange, as well as an increase in the price of monetary gold also added to the result.

Earlier, Moscow pledged to allocate an extra $700mn intergovernmental loan to Belarus.  Minsk expects to receive the funding within the next two months and will use the funds to refinance its debts.

The Belarusian government expects three additional disbursements from the EFSD by the end of 2018 totalling $600mn, a $700mn 10-year loan agreed with Russia for refinancing purposes and $1.6bn non-debt forex revenues to meet $3.4bn in 2018 forex debt service.

Meanwhile, discussions with the Internatinal Monetary Fund (IMF) regarding a potential programme have not made "substantial progress" on key points of contention due to their political sensitivity: state-owned companies and utilities reform, the rating agency Fitch said. Fitch does not factor IMF disbursements into its forecasts.

In July, the IMF's deputy spokesman, William Murray, said that negotiations with Belarus over a new support package are "on hold pending clarity on whether there is high level support in Belarus for policies, particularly in the state-owned enterprises and utility sectors".