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. Last Updated: 07/27/2016

Kudrin: IMF Money Not Needed in 2001

Russia will not need cash from the International Monetary Fund in 2001, but it still hopes that country creditors will ease Moscow's debt burden in peak repayment years, Deputy Prime Minister and Finance Minister Alexei Kudrin said Wednesday.

"I do not think we shall need an IMF credit this year," Kudrin told Ekho Moskvy radio station.

"We shall raise enough revenue not to get deeper into debt, not to increase the debt burden which sometimes throws us to our knees. This is good. We shall leave less debt to our children."

Russia is now enjoying a period of high international prices for its main exports, energy and metals — a great boon to state coffers.

This allowed the government to win parliament's approval to increase extra revenues in the budget earmarked to service foreign debts, including the $40 billion Soviet-era debt to the Paris Club of creditor nations and the IMF.

The upper chamber of parliament approved the budget amendments earlier on Wednesday.

The government and the IMF are currently putting final touches on a one-year precautionary loan agreement, and Kudrin said Russia needed the deal only to raise its reputation in the eyes of the world business community.

"The aim of the program is not to get credits, but to strengthen trust in the country as our credit ratings in the West are not very high," he said.

'We are to carry out reforms that would allow us to live through this period calmly.'
— Alexei Kudrin
Russia also needs the program to start negotiations on restructuring debt to the Paris Club. Prime Minister Mikhail Kasyanov recently said Moscow needed a three- to four-year agreement with the Fund.

Kudrin said interest payments on foreign debts were eating up to a quarter of budget revenues with payments to increase to $18.5-19.0 billion in 2003 versus $14.5 billion this year.

He said the government would try to carry out such reforms that would allow the country to cope with the debt burden on its own, but might need outside help if the results of those reforms were disappointing.

"We are to carry out such reforms that would allow us to live through this period calmly and with stability," Kudrin said, adding the IMF had praised the government's economic plan.

"Another variant, or additional insurance is the possibility of help from governments of other countries that would allow us to postpone part of the payments in peak years. We should hope for such support, but must do everything to do without it."

He said that if the government could ensure a level of 4 to 5 percent annual economic growth and if commodity prices were not too bad, Russia had a good chance to meet debt payments without the need for any debt restructuring.

This year the government hopes to attain a level of 4 to 5 percent growth in gross domestic product after an encouraging 7.7 percent rise in GDP last year.