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IMF approves extension of standby agreement

The board of the International Monetary Fund (IMF) approved a request by Hungary to extend the deadline for calling down the remainder of its SDR 10.5 billion (€11.7 billion) standby arrangement until October 5, 2010 from the original deadline of March 2010, the Finance Ministry said.

Hungary intends to call down only SDR 50 million (about €54 million) of the fourth tranche, originally planned at SDR 1.265 billion (€1.37 billion), because of a relatively high level of central bank reserves and improving chances for financing from the market, the Finance Ministry said. Hungary will be able to draw on the remaining SDR 2.901 billion in the standby facility in four equal disbursements over the remainder of the extended arrangement.

The extension of the agreement was supported by a IMF delegation recently visiting Hungary for a regular review of performance preceding the drawdown of the next, fourth tranche of the loan. (Reuters)