(26 Jun 1998) English/Nat
Russia welcomed on Friday a decision by the International Monetary Fund to release a delayed instalment of a nine (b) billion U-S dollar loan, seeing it as a vote of confidence in Russia's struggling economy.
The I-M-F decided last week to hold up the instalment, saying Russia had to do more to balance the federal budget and reform key areas of the economy.
But investors apparently disagreed, with the stock market closing 4-point-97 percent lower, with traders citing fears that an I-M-F bailout is moving too slowly.
The granting of a delayed instalment of a nine (b) billion U-S dollar I-M-F loan has pleased Russian economists and in particular Deputy Prime Minister Anatoly Chubais.
It has been regarded as a vote of confidence in Russia's ailing economy.
Chubais praised the I-M-F's decision on Thursday to release the delayed 670 (m) million U-S dollar instalment as "quite natural and logical."
SOUNDBITE: (English)
"There is no, any kind of super-difficult problem. So it leaves us some optimism and that's why we will try to speed up the process and to finalise it not in two months like it was announced before but in one month. We hope that this kind of agenda and the deadline will be supported by the I-M-F also."
SUPER CAPTION: Anatoly Chubais, Deputy Prime Minister
The I-M-F decided last week to hold up the instalment, saying Russia had to do more to balance the federal budget and reform key areas of the economy, especially the ineffective tax collection system.
The Kremlin says the new I-M-F loan is needed to replenish Central Bank reserves to prevent a devaluation of the Russian ruble.
SOUNDBITE: (English)
"We should avoid devaluation by all means and my understanding is that the government and central bank have enough means for avoiding devaluation at all."
SUPER CAPTION: Anatoly Chubais, Deputy Prime Minister
Traders said investors fear the aid may come too late to prop up the state finances.
They also cited investors' concerns that Russia will ban trading from offshore tax havens as part of its renewed efforts to crack down on tax evaders.
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