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VILNIUS, Feb 10 (Reuters) - Lithuania's central bank said on Tuesday that it supported arranging a precautionary deal with the International Monetary Fund (IMF) for rapid access to funds if needed in the future.
The economy of the Baltic state has been hit by the global credit crunch and its budget revenues have shrunk.
"So far there has been no need for Lithuania to borrow, but it could be useful to have an agreement with the International Monetary Fund in case something happens and we need to arrange a loan fast and on better terms than we are currently using to borrow from commercial banks," central bank chief Reinoldijus Sarkinas told parliament.
"If there were such suggestions, we would always support such negotiations being started," he added. The centre-right government has said it sees no need at the moment to approach the Fund, but has not excluded the possibility.
Neighbouring Latvia had to seek a 7.5 billion euro rescue led by the IMF and EU last year as its budgetary situation worsened and its economy slumped. Latvia has agreed to slash spending and raise taxes as part of the deal with the Fund.
But Sarkinas reassured lawmakers about Lithuania.
"Those who fear that the Fund might impose some strict conditions should not... because our anti-crisis plan is quite strict already," he said, referring to an austerity plan already approved by the government.
One of the reasons Latvia had to go to the Fund was to help finance its rescue of its second-largest bank.
Sarkinas said that Lithuania did not have similar problems at the moment. "All the banks are well capitalised, none is facing bankruptcy today," he told lawmakers. However, he added: "It would be premature to say that no assistance will be needed ... Nobody is insured against bankruptcy."
Plans for a new stabilisation fund, which banks could tap if they had liquidity problems, could help to increase confidence in the banking sector, he said. (Reporting by Nerijus Adomaitis, writing by Patrick Lannin; editing by David Stamp)