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. Last Updated: 07/27/2016

Deputy Premier Dismisses IMF Role

In unusually confrontational terms, a senior government minister Monday dismissed the role of International Monetary Fund loans for the Russian economy and said the country could pull off economic reforms without foreign help.


Oleg Davydov, Russia's deputy prime minister for foreign economic relations and chief foreign debt negotiator, told Interfax that Russia was free to "listen to advice but make our own decisions" if the IMF demanded excessively tough policy conditions.


"The IMF does not have an absolute monopoly on the truth," Davydov told the agency. "The approach the fund is preaching to Russia is based on a tough program developed by Harvard University. That program far from always suits Russia."


Davydov's remarks came as Russian officials continued meeting with IMF delegations that arrived last week to assess Russia's performance under the strict monetary program agreed with the government as part of a three-year $10.1 billion Extended Fund Facility loan.


They also followed comments last week by Deputy Prime Minister Viktor Ilyushin that Moscow might adopt inflationary policies that "might not please certain international monetary organizations." Another top minister later reiterated that the government would not print money.


The IMF delayed the payment of a $340 million tranche last month, promising to unlock the funds after seeing clear evidence of sustainable improvement in federal tax revenue.


Also Wednesday, Finance Minister Alexander Livshits hinted that Russia's debut Eurobond issue -- now drawing positive response from investors on a foreign roadshow -- could be delayed from its expected float sometime in the next week.


Livshits told Interfax that Prime Minister Viktor Chernomyrdin had authorized the Eurobond issue for November or December, and said Russia had not yet decided how much money it would seek on the placement.


In another development, Reuters reported that Livshits had taken over the debt portfolio from Davydov in a reshuffle of ministerial duties earlier this month. He also will head a tariff and customs commission formerly chaired by Davydov and will head a government commission on public-sector wages, the agency said.


Davydov said in the Interfax interview that the IMF payments had more political significance than economic impact and were largely regarded as "what international financial and economic circles think of the course of reforms in Russia.


"Despite a few hitches that indicator is today positive," he said.


"The tranches of the Extended Fund facility that the IMF is delaying under various pretexts mean nothing to us. The Russian economy is stabilizing and can do without that money," Davydov added.


While Russian tax receipts have risen sharply over the past two weeks, analysts said the generally positive mood of the IMF mission over the improvement may not result in quick approval of the next loan payment.


But Renaissance Capital investment bank said in a report Monday that "it is likely that Christmas goodwill will be enough to ensure the funds will be released before the end of the year."


Richard Layard, an expert at the Russian-European Center for Economic Policy, praised the government's recent initiation of bankruptcy procedures against selected corporate tax deadbeats.


"That would then make possible the resumption of payments by the International Monetary Fund," Layard told a press conference. But he said it might take two or three months for the IMF delay to be resolved.


?Ukraine is expected to announce in the next few days an agreement in principle on a new $2.5 billion to $3 billion loan program with the IMF, sources close to the talks said Monday, Reuters reported from Kiev.


"It sounds like they've made their breakthrough," said one economist.