The IMF shortchanged Moscow
But there will be no payments from Russia
Sergei Stepashin and Viktor Gerashchenko signed the memorandum on economic policy only yesterday at 18.00. And they should have done this a week ago. The main reason for the delay is that the IMF decided to give Russia less money than Moscow owes it back.

Until yesterday, Moscow expected to receive from the IMF an amount equivalent to the volume of payments on Russia's debts to the same IMF. Everyone understood that the loan would be virtual: it would not add money to the Russian budget, it would remain there as it was in the IMF accounts, but at least they hoped that the problem of payments on IMF debts would be closed this year.
The IMF, however, decided otherwise. First Deputy Minister of Finance Oleg Vyugin admitted that “the fund is trying to ensure that we borrow from it less than what was paid to it.” And he achieved it. Russia must return $3-4 billion to the fund every year for the next five years. “As for 1999,” Vyugin said, “the IMF is giving us only $1.9 billion until the end of this year, and we must return $4.4 billion to it.”
The IMF is going to provide Russia with three tranches by the end of 1999 and four in 2000 at $630 million each - a total of about $4.5 billion over a year and a half. The issue will be finally resolved on July 28 at the IMF Board of Directors. As a result, the fund wants to force Russia to fork out money.
Vyugin believes that “we can handle it.” Indeed, there is such an opportunity; it is provided by the continuing rise in oil prices. And the Central Bank is quite rightly going to take advantage of the situation to replenish its foreign exchange reserves. For example, yesterday, compared to the previous day, the total turnover on the MICEX increased by 26%, and the dollar fell in price. The Central Bank's play to lower the dollar exchange rate is no secret to other market participants, but they assess the situation as uninteresting: since the rate will not rise above 25 rubles in the coming months. for a dollar, there’s nothing to catch.
The question is whether the Central Bank will again, as in the first half of the year, finance the government by paying its external debts. Viktor Gerashchenko has already stated that he does not intend to continue holding the White House as a freeloader. Therefore, it is possible that Moscow will not change its strategy - the IMF debts will be repaid only as tranches are received.
But even if you have to give up your hard-earned money, the agreement with the IMF is still beneficial to Russia. In the end, it’s not about the volume of the loan. The fact that the fund has approved Russia's economic policy opens up the possibility of restructuring Russian debts to the Paris and London clubs. It is no coincidence that, as soon as he signed the memorandum, Sergei Stepashin called US Vice President Al Gore. Having reported the good news about the conclusion of peace with the IMF, Stepashin has the right to expect support from Gore in negotiations with creditor clubs. In any case, such support was promised to Russia in Cologne at the recent G8 meeting. And the price of these negotiations outweighs the volume of the IMF loan. Even if the deferment of payments is limited to 1999 and 2000, and this is precisely what the finance ministers of Russia’s G8 colleagues insist on, it will allow the federal budget to save, according to Mikhail Zadornov’s calculations, $16 billion in these two years.
VADIM Kommersant-BARDIN

Newspaper "Kommersant" No. 122 dated July 14, 1999, p. 1

Themes:

IMF activities