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. Last Updated: 07/27/2016

Chubais Says Debts Will Be Repayed


WASHINGTON -- Russia will continue to repay its foreign debts whether or not leading creditors agree to its request to postpone some payments, said First Deputy Prime Minister Anatoly Chubais.

Repayments on an external debt of $120 billion, mainly obligations inherited from the former Soviet Union, are expected to peak two years from now, Chubais said Thursday in Washington where he was attending meetings of the International Monetary Fund and World Bank.

In 1997 and 1998, he said, Russia's debt payments will total $14 billion to $16 billion.

In Moscow, Foreign Trade Minister Oleg Davydov said the first $1.1 billion tranche of a $6.8 billion standby loan from the IMF would be used to service Russia's foreign debt.

The money, he said, would be received in May and would be used to pay off creditors from both the Paris and London Clubs.

Chubais said foreign borrowing may fall short of the $12.3 billion envisaged in this year's budget because the IMF approved its loan later than expected.

International monetary sources said the shortfall could be about $1 billion and might have to be covered by more spending cuts, domestic borrowing or even a Eurobond.

Chubais said that during his meetings in Washington with the finance ministers of all the G-7 nations, he proposed that the current practice of rescheduling repayments on an annual basis should be replaced by an agreement on more medium-term rescheduling.

He denied reports that the G-7 -- the United States, Japan, Germany, France, Canada, Italy and Britain -- had rejected the idea.

"I would say that we have no final reply at the moment,'' he told reporters at the National Press Club. "Today in the G-7 there is no common position with regard to our proposals."

He said Russia expects "a more precise answer" within 90 days.

"Russia has always been very reliable in carrying out its obligations," Chubais said.

"This year and next year we will carry out all our obligations, both from Russia and the former obligations of the Soviet Union,"he added.

But he would not elaborate details of the proposed rescheduling arrangement because negotiations are still under way.

Chubais, considered one of Russia's leading reformists, also said the rebellion in the breakaway Chechnya republic is costing Russia significantly less than some estimates in the domestic and international media.

Noting that the war is being financed exclusively from budgets of the ministries involved, he said reports of expenditures of up to $5 billion "cause those of us who know what the real numbers are to smile."

"If this were really true, we would have to stop paying salaries for doctors, teachers" and other government officials, he said. "We would basically have to close down the whole country for three months."

Chubais said a detailed financial accounting will be submitted to the State Duma, the lower house of the Russian parliament, within the next several days. (