IMF AGREES TO LEND RUSSIA $10 BILLION.

Michel Camdessus, managing director of the IMF, announced yesterday the extension to Russia of a new, three-year loan equivalent to $10.2 billion. (1) The IMF decision followed what is now a familiar pattern of events: prolonged and difficult negotiations at the expert level over the conditions of the loan, while the Russian leadership proceeded with some distinctly IMF-unfriendly policies (such as President YeltsinÕs announcement of increased welfare spending and increased subsidies to the coal mining industry); heavy pressure on the IMF by western nations such as the USA and Germany; a tete-a-tete between Prime Minister Viktor Chernomyrdin and Camdessus in Washington; and, finally, an IMF announcement that included both strongly favorable assessments of Russian economic prospects and a set of strict conditions. The loan has been referred to in the western media in dollar amounts varying between $9 and $10 billion. This is because it is denominated in IMF Special Drawing Rights (SDRs), whose dollar equivalent varies with the dollarÕs exchange rates with other currencies. The loan, like last yearÕs standby credit of $6.9 billion, will be disbursed in monthly tranches and can be halted at any time if the agreed conditions are not met.

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