The International Monetary Fund approved a $4.5-billion financial package for Russia on Wednesday aimed at helping to keep the country afloat through its December parliamentary elections and presidential voting scheduled for June 2000.
About $640 million would be made available immediately, said an IMF spokeswoman. Other installments will be paid out during the next 17 months, she said.
President Boris Yeltsin’s special envoy to international financial institutions, Mikhail Zadornov, worked out the final details with the IMF’s deputy managing director, Stanley Fischer, and the 24-member executive board during a daylong meeting.
The long-awaited deal would allow Russia to stave off a complete international default and gain access to new loans from the World Bank and Japan. For its part, the IMF retains some leverage over the policies of its largest debtor. Russia owes the IMF $18 billion.
The move to resume lending comes about a year after Russia defaulted on its debts and devalued its currency last Aug. 17. The IMF froze a loan package worth $22.6 billion after the financial collapse but reached a preliminary accord on new financing in April.
There has been some criticism of new IMF lending to Moscow in Congress and elsewhere. House Majority Leader Dick Armey (R-Texas), one of the IMF’s most vocal critics, said last week that the United States should withhold support for further IMF lending until Russia has accounted for use of past aid. The United States is the IMF’s largest contributor.
The new loan was being made contingent on Russian parliamentary approval of legislation intended to increase government revenue, combat corruption and restructure the commercial banking system.