A $1.57 billion loan for Bosnia and Herzegovina has been approved by the executive board of the International Monetary Fund (IMF) on Wednesday. The loan, aimed at helping the Balkan country mitigate the impact of the global crisis, was earlier stalled due to the country's inability in implementing a series of economic measures.

In May, the loan was negotiated on the condition that Bosnia would abide by cost-cutting measures and impose monetary restraint. However, with differences arising between the two sovereign entities that constitute Bosnia - the Muslim-Croat Federation and the Serb Republika Srpska - the IMF board's approval of the loan was delayed.

According to the IMF, the loan "is designed to safeguard the currency board and cushion the effects of the deteriorating external environment, while adopting policies to redress fiscal imbalances and strengthen the financial sector."

The board statement confirming the loan approval for Bosnia said that the country will have immediate access to nearly $282 million of the three-year standby agreement, with the remaining amount to be made available in installments, depending on quarterly reviews.

Last month, the Bosnian Finance Minister Dragan Vrankic had said that monetary support from the IMF and other financial institutions can help the country cutback its deficit from the existing 8.0 percent of GDP to 4.0 or 4.5 percent by 2009-end.