RUSSIA SEEKS EMERGENCY LOAN.

Russian president Boris Yeltsin has left First Deputy Premier Anatoly Chubais in charge of the economy while Yeltsin, accompanied by First Deputy Premier Boris Nemtsov, is in Sweden and Prime Minister Viktor Chernomyrdin is in Minsk. The Financial Times reports today that Chubais has asked a number of western banks in Moscow to prepare an emergency financing package of up to $2 billion to enable the Russian government to cover its budget deficit and pay off wage arrears to federal employees. The banks in question include Salomon Brothers, Credit Suisse First Boston, Chase Manhattan, and Deutsche Morgan Grenfell. Though all refused to comment yesterday, the banks are believed to have responded positively to Chubais’ request for a bridging loan. (Financial Times, December 3)

President Yeltsin has declared that all wage arrears must be cleared up January 1. He is said to have been persuaded that this is possible by Nemtsov and to have ignored advice from Chubais that the money would not be available.

The Russian Central Bank has denied reports that the visit of two senior Russian officials to Washington last week involved a request for emergency aid from the International Monetary Fund. Nonetheless, the government clearly hopes that the IMF will expedite payment of the delayed $700 million tranche of its $10 billion extended fund facility by the end of the year. U.S. deputy treasury secretary Lawrence Summers responded on December 1 with a warning that Russia must improve its tax collection record before it can expect more money from the IMF. (Reuter, December 1) Chubais announced in September that Russia would not need to borrow again from the IMF after the remaining tranches of the loan are received. That statement was probably received with some equanimity by the IMF, which had not been planning to offer Russia any more in any event.

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