The International Monetary Fund is willing in principle to conclude a new €750 million credit arrangement with Bosnia and Herzegovina and the negotiations which have just begun could end in December, IMF representative to BiH Andrew Jewell has announced.

According to him, BiH authorities would like an extended three-year arrangement and use the money to deal with the effects of the COVID-19 pandemic and for reforms, first and foremost of the health sector and public finance, the Banja Luka Nezavisne Novine daily said on Saturday.

Our advice to the local authorities is to focus on even greater support for the economy and the need to protect vulnerable citizens, which demands serious finance, and that costs, Jewell told the paper.

If the negotiations on a new arrangement are concluded as planned, the IMF Steering Committee could approve its implementation in January or February.

Earlier this year, the IMF approved €330 million for BiH via its Rapid Credit Facility to help it deal with the pandemic.

Before that, the IMF cancelled a €543 million loan which BiH obtained based on a 2016 Extended Fund Facility. Only €155 million was paid out, while the rest was cancelled due to BiH's failure to implement reforms.

Jewell said that arrangement was likely too ambitious as in 2016 the IMF tried to achieve a lot in many areas, which would now be avoided.

We will try to set more rational conditions, which means less structural guidelines referring to reforms and deadlines for meeting the requirements in order to get the money, he told the daily.