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Audit: Russia Misreported Reserves

July 1, 1999

WASHINGTON (AP) _ Russia misreported its foreign currency reserves to the International Monetary Fund by $1 billion in 1996, according to an audit of the Russian Central Bank’s dealings with an offshore investment company.

The Washington Post, citing sources today, said the audit by the accounting firm PricewaterhouseCoopers was ordered to provide IMF officials with full disclosure of Russia’s dealings with the offshore firm.

Officials from the IMF, which has poured billions of dollars into the Russian Central Bank’s reserves to help bolster economic reform, are in Moscow this week discussing a possible new loan package.

Results of the audit have been presented to the Central Bank and the IMF but the bank’s chairman has resisted making the audit public, the Post quoted sources as saying.

An IMF spokeswoman in Washington, speaking on condition of anonymity, said, ``We have not received the final report. We’ve only seen a draft.″

She said the IMF would like the Central Bank to make the final report public.

The case in which Russia is alleged to have misled the IMF involves a $1 billion internal loan that the Central Bank made to the Russian government in 1996.

The Central Bank was given a promissory note in exchange for the loan, but the note was then sent to an offshore firm, which skewed the Russia’s reports to the IMF on the size of its hard currency reserves, the Post said.

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