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Russia: Camdessus To Brief Board On Talks With Chernomyrdin

  • Robert Lyle

Washington, 28 August 1998 (RFE/RL) --International Monetary Fund (IMF) Managing Director Michel Camdessus will give a special briefing today to the fund's board of executive directors on his talks with Russian Prime Minister-designate Viktor Chernomyrdin and Ukrainian President Leonid Kuchma.

The surprise, emergency tripartite meeting in Crimea started Wednesday afternoon and ended at four in the morning on Thursday. It's sole purpose was to discuss Russia's rapidly deteriorating financial situation and its impact on neighboring countries, especially Ukraine.

There has been virtually no information released out of the meeting and even senior level staff at the IMF in Washington have not been briefed in advance on Camdessus' discussions.

"Clearly, Russia has gone completely off track," commented one source at the fund, saying the fund would prefer to get them back on track. But until Camdessus reveals what went on in that night-long Crimean meeting, few in Moscow, Kyiv or Washington know exactly how -- if indeed, at all -- the head of the IMF believes Russia might be rescued.

Chernomyrdin told reporters in Moscow that Camdessus had said the IMF would support Russia in whatever has to be done, but fund officials point out that such support is psychological, not financial.

IMF officials have been saying that the $22.6 billion international rescue package put together by the fund in July was the extend of the money Russia could expect to receive.

The first $4.8 billion drawing of the IMF part of the package has already been burned up by the Russian government and central bank paying off some debt and trying to protect the ruble's exchange rate. The bank has now given up defending the ruble's value against the dollar and other western currencies, saying it has no more funds to do it.

Some press reports in Russia and elsewhere suggested that Chernomyrdin had asked Camdessus to go ahead and release early the next $6.4 billion second loan drawing, due next month. But IMF sources continue to emphasize that unless the Russian reform program is on track and basically on schedule, that second tranche will not be released.

The IMF's First Deputy Managing Director Stanley Fischer, who has participated in much of the negotiation with Russia, was said to have been particularly upset over Moscow's decision to impose the 90-day moratorium on repaying government debt and then implementing a forced rescheduling. Debt reschedulings which are imposed on creditors violate usual IMF policy.

World Bank officials are quietly monitoring the situation in Russia, but say they must await the IMF's verdict before taking any actions themselves.

The bank has disbursed the first drawing of $300 million from it's $1.5 billion part of the rescue package. The second drawing of around $600 million was expected to be released in December or January. But bank officials said when the loan was approved in early August that disbursing the tranche would depend strictly on Russia's achieving an agreed list of structural reforms. That condition remains, say the officials, and will determine whether the second drawing can be made.

At the same time, however, the bank does not generally continue structural adjustment loans to countries which are off track on their IMF programs.