An International Monetary Fund mission will extend its stay in Belgrade to finish its review of a 2002-2005 loan deal with Serbia and Montenegro, as the government tries to convince them reforms are still on track.
A central bank statement on Friday said "progress was marked on issues covering the sixth revision of the ongoing financial arrangement". It added that IMF staff were staying to "finalise successfully" the $900 million deal, but gave no other details.
The IMF postponed their final mission, originally scheduled for early October, because Serbia adopted watered-down versions of a pension reform law it had promised.
Fund officials arrived last weekend to assess the rejigged laws and have already had a week of closed-door talks with Belgrade. Serbian officials have expressed optimism that a deal would be reached, but have been tight-lipped on details other than to say talks were tough.
A successful IMF deal would bring Serbia further debt forgiveness from the Paris Club of sovereign lenders, which gave it a phased write-off deal on $4.5 billion debt in 2001.
Without reforms, the IMF could simply let the loan expire incomplete, costing Belgrade $180 million in the IMF loan tranche, plus $750 million in Paris Club debt forgiveness.
The IMF-backed reforms included selling control in Serbia's two refineries and reforming the heavily-subsidised pension system which currently eats up $3.0 billion or 14 percent of Serbia's gross domestic product.
Both plans caused an outcry and the government backed down under pressure from unions and populist politicians.