20000206

IMF says Russia needs structural reform to win loan

MOSCOW: Russia's progress in implementing vital structural reforms has been limited and this is standing in the way of the release of new loans, the International Monetary Fund said on Saturday.

"Further progress in implementing structural reforms will be needed before the IMF's Executive Board will consider the next disbursement under the SBA (Stand-By Arrangement)," the IMF's Moscow office said in a statement.

An IMF mission on Saturday concluded talks with Russian officials which Moscow hoped would help to unlock the next $640 million tranche of a $4.5 billion loan programme that has been held up since last September.

Russian officials have linked the delay to Western concerns about the military campaign in breakaway Chechnya, but the IMF statement reiterated that structural reform shortfalls were the main reason.

"This remains a cause for concern since positive macroeconomic performance cannot be sustained without further significant structural reforms needed to transform the Russian economy," it said.

It added that understandings were reached on the basic parameters for fiscal and monetary policy in the first half of 2000. It also urged the government to increasingly use commercial bank and non-bank sources to cover its domestic financing needs rather than strain central bank resources.-Reuters