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. Last Updated: 07/27/2016

Japan set to release $800 million loan, officials say

Japanese officials say they are close to an agreement on releasing up to $800 million in official credits and government guarantees for loans to Russia.

Speaking in Moscow, the officials said in an interview that they were hopeful of "finishing the job" before President Boris Yeltsin's visit to Japan in September.

They denied that these funds - $100 million in a loan by the Export-Import Bank of Japan and $700 million in insurance cover issued by Japan's Ministry of International Trade and Industry - had been held up by the dispute over the Kurile Islands Rather, they said, the delay was caused by uncertainty on the Russian side over which bank would be the signatory. This has now been decided, and Vneshekonombank has been designated by the Russian government.

Japanese officials do, however, admit that almost $2. 6 billion in promised financial assistance to Russia is being withheld until the results of Yeltsin's visit to Japan can be assessed. This sum includes $900 million in

Export-Import Bank loans and $1. 8 billion in cover for the Ministry of International Trade and Industry.

To date, the officials say, only $10 million in cover for the ministry has been disbursed. They expect, however, that agreement on the Russian bank signatory will start the process of releasing the rest of these funds.

The Export-Import Bank of Japan

will not disclose the full extent of Russia's indebtedness at present. But Japanese officials said that "through the Paris Club we have agreed to the deferral of $212 million in official loans".

They also said that Russian government-secured and commercial liabilities to Japan total approximately $6 billion.