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. Last Updated: 07/27/2016

IMF Says No Decision Yet on Loan




Despite Russia's pleas, the International Monetary Fund has not yet made a decision on lending additional money to Russia, the IMF representative in Moscow said Thursday. Martin Gilman said the IMF's $22.6 billion aid program for Russia, arranged last summer, has largely been scrapped in the wake of Russia's financial crisis. "It's still early to say whether there will be such a new, wider credit from the IMF,'' Gilman was quoted by Interfax as saying.


The IMF designed the bailout package when Russia's markets were tottering last summer. Since then, the Russian ruble has tumbled, inflation has risen sharply, and the government has effectively defaulted on several debts - prompting the IMF to freeze its rescue plan last autumn.


Now the package has been basically abandoned, Gilman said, and a new program needs to be discussed when a team of IMF officials arrives in Moscow on Wednesday.


Russian First Deputy Prime Minister Yury Maslyukov arrived in Washington on Thursday for talks with IMF chief Michel Camdessus. The Russian leader, who acts as the Kremlin's liaison with Western creditors, was also expected to meet with World Bank officials.


The talks will deal with ways of restoring trust in Russia and the government's austerity program, Maslyukov said Thursday on Russian television, Interfax reported.


"We are inviting our IMF and World Bank partners to come to Russia for a joint discussion of those aspects of the program that interest them most," Maslyukov was quoted as saying.


The Russian government would like to prove that "we have done the 1999 budget correctly," he said.


Russia wants additional money to help pay off debts, but the IMF wants President Boris Yeltsin's government to implement an effective recovery program before it sends more cash.


"Unfortunately, we did not reach agreement before the end of the year, so it is now important to reach it rapidly,'' Gilman said.


The Russian government has been unable to borrow money on international markets since August. Yet the government is hoping for more than $5.2 billion in loans this year to cover its planned budget deficit.


The first deputy parliament speaker, Vladimir Ryzhkov, said Thursday that Brazil's economic turmoil, coming on top of crises in Asia and Russia, could prompt the IMF to review its strategies for emerging markets.


"It is obvious that the financial methods once offered by the IMF have proved unfeasible and should be revised,'' Ryzhkov said, Interfax reported.


Meanwhile, Russia's huge gas monopoly Gazprom posted a loss of 45 billion rubles (more than $2 billion) for 1998, a company official said Thursday.


Gazprom is by far Russia's largest company, and its poor performance reflects the country's sharp economic decline. Gazprom has often complained that many of its customers are not paying their bills.


The company had posted a net profit in 1997 of 38.7 billion rubles ($1.8 billion at Thursday's official rate).


Gennady Yezhov, an assistant to the company president, said Gazprom would be "forced to use its own capital to cover its losses and reduce costs even further.''