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. Last Updated: 07/27/2016

Negotiator Seeks IMF Budget Aid

A top Russian aid negotiator has called for help from the International Monetary Fund in drawing up a new government budget, but Western economists in Moscow said Tuesday that the move is tactical and will not affect the release of $1.5 billion in international aid to Russia.


"This is a typical negotiating position," said one Western economist. "It just shows that they don't want anyone to believe that there's a sense of crisis," he said, referring to the Russian government.


An IMF delegation is scheduled to visit Moscow on Friday to discuss economic policy with members of the new cabinet, which Prime Minister Viktor Chernomyrdin has filled with ministers averse to tight monetary policy..


Konstantin Kagalovsky, IMF executive director for Russia, told Reuters in Washington on Monday that the government would like to work with the fund on an economic program that would release credits of $1.5 billion, which have been held up by Russia's failure to meet inflation and budgetary targets agreed with the IMF last year.


"What we want to do is not wait for the parliament to formulate the budget," he told Reuters. "We want the fund to come now and work with us together.


"The Russian prime minister is now very keen to go ahead with an economic policy which should be elaborated together with the IMF."


Kagalovsky's comments appeared to contradict statements from members of the government, who have called for more government credits to sagging sectors of the economy.


Central Bank Chairman Viktor Gerashchenko has forecast monthly inflation between 20 and 30 percent, far above the IMF's targets.


Economics Minister Alexander Shokhin said Monday that higher inflation would soon keep Russia from meeting IMF standard criteria.


Although IMF officials have indicated in the past that they might bend the fund's criteria in order to encourage reforms in Russia, one Western economist doubted that this would be the intent of the upcoming visit from the IMF delegation, saying that such visits are a routine monthly occurrence.