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. Last Updated: 07/27/2016

Moscow to Lend Tbilisi Millions

Russia will extend neighboring Georgia 10 billion rubles ($7.7 million) in long-term credits this year, Itar-Tass has reported.

Georgia's decision in October to join the Commonwealth of Independent States, a Russian-dominated military and economic grouping of former Soviet states, was likely to pave the way for further Russian financing this year, the agency added.

Relations between Russia and Georgia, stretched to breaking point last year, improved after Georgian leader Eduard Shevardnadze took his country into the CIS to enlist Moscow's support to quell two rebellions late last year.

|Itar-Tass did not give the terms of the credit, which contrasts earlier deflationary pledges by the Russian government that it will not extend cheap loans to former Soviet states.

Georgia's economy, which contracted by more than 60 percent last year, is heavily dependent on Russia.

Its parliament chairman Vakhtang Goguadze has called for urgent talks with Moscow on joining the so-called ruble zone of countries using the Russian currency.

Georgia replaced the ruble with an interim coupon in August last year. But the currency, launched at par to the ruble, has gone into free-fall against both the dollar and the ruble and is now by far the weakest currency in the former Soviet Union.

Only Russia and the impoverished Central Asian country of Tajikistan currently use the ruble. Belarus has also reached agreement on using the currency, but it is unclear whether it will go ahead.