CONDITIONS CREATED FOR AGREEMENT BETWEEN BH AND INT MONETARY FUND

SARAJEVO, June 23 (Hina) - The head of the International Monetary Fund mission in Bosnia-Herzegovina Scot Brown said in Sarajevo on Monday that last week's passing of seven acts of key importance for the functioning of BH provided conditions for the signing of a special USD 100 million- worth stand-by arrangement. "The IMF has since last year tried to reach an agreement with authorities in BH on an economy programme which could be assisted by a stand-by arrangement", Brown told reporters, adding that "recent steps forward make us believe the job might be concluded in the forthcoming weeks." Brown explained that the proposed programme was based on four provisions: first, the founding of a monetary committee within which the Central Bank had the obligation to maintain a fixed domestic currency rate, excluding issuance of loans which could cause inflation. The programme's second provision envisages the establishment of a budget which would be financed only by real domestic profit and international assistance, with the condition that the Government would not be able to borrow money from commercial banks or enterprise. According to Brown, the agreement between IMF and the BH Government also envisaged a large influx of international assistance under favourable conditions whose primary aim was BH's reconstruction. "We're also looking for structural and law reforms which will bring about a quick transition to market economy", said the head of the IMF mission in BH. He pointed out that the preconditions for meeting these demands were the implementation of laws on the establishment of the country's key economic institutions, the adoption of a budget in the two entities which would consider commitments to the state as well as quick measures for the establishment of a domestic currency. Brown believed that economic criteria would gradually strengthen the position of the convertible mark (BH's uniform currency), even though the Croatian kuna and the Yugoslav dinar would remain in circulation in the transition period. The new currency, the convertible mark, was expected to be put into circulation by late October, Brown concluded. (hina) ha 231346 MET jun 97