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IMF Plans Moscow Meeting Next Week

March 31, 1999

MOSCOW (AP) _ A mission from the International Monetary Fund will travel to Moscow next week to finalize an agreement on new loans, officials said Wednesday.

The IMF agreed in principle to give Russia a loan following three days of talks that ended Monday, but neither IMF chief Michel Camdessus nor Prime Minister Yevgeny Primakov named an amount.

Russia wants the first installment in early May, Russia’s chief negotiator with the IMF, First Deputy Prime Minister Yuri Maslyukov, told a news conference Wednesday.

The IMF mission arriving Tuesday will prepare a joint policy statement with the government to submit to the IMF board of directors in late April.

A group of international lenders led by the IMF put together a $22.6 billion loan package last summer when Russian markets began tumbling under the impact of the global crisis in developing economies.

Installments were suspended after the Russian government abruptly devalued the ruble and defaulted on some loans in mid-August.

World Bank chief James Wolfensohn will visit Moscow on April 14-15 for talks intended to revive a $1.85 billion loan suspended when the Russian economic crisis hit last August, the Interfax news agency reported.

Russia desperately needs the new loans to help avert a looming default on its foreign debt. The government is supposed to pay $17.5 billion to foreign creditors this year, but has only factored about half of the sum, hoping to reschedule or write off the remainder.

Speaking in a television interview Tuesday, Finance Minister Mikhail Zadornov said Russia would get at least $5.5 billion from the IMF, the World Bank and other foreign lenders.

He added that the actual size of the IMF loan was less important than its expected snowball effect on other lenders waiting for the fund to make the first move before offering new loans or rescheduling old ones.

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