February 3 (SeeNews) - The International Monetary Fund (IMF) said it has delayed the release of the second loan tranche under its current three-year funding arrangement with Bosnia because the country's authorities have failed to meet reform targets.
“We cannot expect the formal completion of the first review in February because there are delays in the completion of prior actions", Francisco Parodi, the resident representative of the IMF in Bosnia, said in a response to a SeeNews inquiry late on Thursday.
"We are waiting for them to be completed for the IMF staff to recommend (Executive) Board approval of the first review,” Parodi noted.
In September last year, the IMF approved a three-year 553.3 million euro ($594.8 million) loan to Bosnia and Herzegovina to support the country’s economic reform agenda.
The Executive Board’s decision enabled an immediate disbursement of about 79.2 million euro, while the remainder was said to be made available in 11 instalments subject to quarterly reviews.
Bosnia's entities, the Serb Republic and the Federation, had hoped to receive the second tranche before the end of 2016 to finance budget deficit but the IMF refused to release the funds before seeing progress on reforms.
The lender noted earlier it expects Bosnia to cut public debt, improve business climate, and secure financial sector stability.
Due to the absence of IMF funds, both entities have turned to bond auctions to service their obligations.
($=0.930024 euro)