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To: lorne who wrote (29031)	2/26/1999 9:25:00 PM
From: goldsnow	Respond to of 116779

Russia Has Repaid $4.5B in 6 Months Friday, 26 February 1999 M O S C O W (AP) RUSSIA HAS paid $4.5 billion of its post-Soviet foreign debt over the past six months, the foreign minister said Friday. In an interview on Russian state television, Mikhail Zadornov said the government had been making the payments out its hard-currency reserves, and "it cannot, of course, go on much longer in this way." He said the government had begun restructuring and repaying its debts on treasury bonds. "At the same time, we have not run up any debts either at home or on foreign markets," he said. "This is the best proof that Russia needs support." The government has said it can only pay about half the $17.5 billion in foreign debt that fall due this year. It hopes to reschedule the rest, though no deals have been worked out with foreign creditors. Zadornov said a restructuring deal should be worked out with the International Monetary Fund in March or April, adding he was certain the talks would end successfully because "neither Russia nor our partners from the IMF have another choice." The IMF suspended its loan program to Russia after the country plunged into financial crisis last August and defaulted on some of its debts. The IMF wants Russia to implement a viable economic program before it resumes loans. Meanwhile, a lawmaker accused Russia's Central Bank on Friday of illegally investing its hard currency reserves in government treasury bills and hiding some of the profits. Nikolai Gonchar, an independent deputy who serves on the budget committee of the lower house of parliament, the State Duma, told a press conference the bank had channeled the reserves through FIMACO, an offshore company registered on the British Channel Island of Jersey. "Russia created a system under which (members of the) high-ranking financial elite ... receive personal income by making the country indebted," Gonchar said, adding that he had Central Bank documents to prove his claim. The allegation is the latest twist in a scandal involving the Central Bank, which has been accused of transferring $50 billion in reserves to FIMACO to hide it from foreign creditors. But Gonchar accused Central Bank officials of making money on investments using the FIMACO accounts. Gonchar alleged the Central Bank's FIMACO accounts earned profits of up to 240 percent in 1996. "Where did these profits go?" he asked. "We can and we must find this money." Also Friday, Russia and the World Bank signed a $400 million loan agreement to repair and expand roads in western Russia and Siberia. Unlike most World Bank loans to Russia, the road loan is not contingent upon Russia reaching an agreement with the IMF. As much as $1.85 billion in other World Bank loans are on hold pending a new agreement with the IMF.