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. Last Updated: 07/27/2016

IMF Team, Russians Optimistic

Senior IMF negotiators prepared to meet top Russian officials about a $6.3 billion standby loan Monday with high hopes of success, and Moscow signaled it might make a long-delayed payment to its Western bank creditors.


Western economists said the International Monetary Fund is almost certain to agree to the loan after Parliament passed an austerity budget for 1995 on Friday and President Boris Yeltsin last week vetoed a bill nearly tripling minimum monthly pay.


A senior Finance Ministry official reinforced the mood of optimism by announcing that Russia may pay $100 million to the London Club of commercial banks Tuesday out of $500 million in arrears that it is due to pay back by April.


But economists said Russia is not likely to get fresh IMF financing before the end of March, and bankers said any deal with the fund would have only symbolic importance for efforts to restructure Russia's debt, now put at more than $120 billion.


The country's stabilization program faces fresh challenges from the powerful agrarian lobby, which is demanding continued state subsidies, and thousands of coal miners who are threatening to strike over delayed wages, economists warned.


December's parliamentary polls will be another threat to Russian belt-tightening plans and the government's promise to the IMF to cut monthly inflation to below 2 percent by the end of 1995, prominent Russian economist Andrei Illarionov said.


Illarionov said that although monthly inflation was forecast to fall to around 12 percent in February from January's 17.8 percent, there is a real danger the government could prime the economy with cash prior to the elections.


IMF Managing Director Michel Camdessus, expected in Moscow before mid-March is likely to seek assurances from Yeltsin that reforms will continue, senior Western economists said.