Russia Says IMF Aid Deal Is Imminent

• Published in: The Wall Street journal Asia
• Main Author: By staff reporters Matthew Brzezinski, Andrew Higgins and John Bussey in Moscow
• Format: Newspaper Article
• Language: English
• Published: Victoria, Hong Kong Dow Jones & Company Inc 10.07.1998
• Subjects: Bank reserves; Civil disobedience; Interest rates; International organizations; Investments
• ISSN: 0377-9920

In an interview, Anatoly Chubais said he expects to reach a preliminary deal with the IMF by Saturday. An aide said that estimates pegging the total package at $10 billion to $15 billion were generally correct, and that the IMF portion would likely amount to about 40% of the final figure. Mr. Chubais expects the rest to come from private banks and the World Bank, with the private institutions providing the bulk. He said parallel negotiations with the World Bank this week were positive. Mr. Chubais said he doesn't expect the country to devalue the ruble, chiefly because international aid would tide Russia over the current liquidity crisis. He added that he expects Russia's economy to resume growing in 1999, though few private economists agree with him. Russia last year posted its first growth since the collapse of the Soviet Union, but sank back into decline this year, with GDP contracting by 0.2% in the first six months of the year. Russia is the latest nation to be swept up by the Asian crisis. The country has been hobbled by a drop in world oil prices (oil and gas are Russia's chief export), sagging tax receipts, overspending by the government, and fleeing foreign investors. In an effort to shore up the ruble, the government has raised interest rates and bought its currency with dollars held in its foreign-exchange reserves. The economy, and the country's financial markets, have nonetheless continued to deteriorate.