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Gerashchenko says Russia used IMF funds properly

The chairman of Russia's central bank, Viktor Gerashchenko, on Wednesday denied claims that billions of dollars from the International Monetary Fund had been improperly used.

This content was published on September 1, 1999 - 17:47

The chairman of Russia's central bank, Viktor Gerashchenko, on Wednesday denied claims that billions of dollars from the International Monetary Fund had been improperly used.

Gerashchenko, speaking in Zurich, said the money from the IMF was used correctly to support budgetary revenues, and he dismissed suggestions they had been siphoned off as part of a money laundering scheme.

"The money which was received from the IMF was used properly, I mean in the sense... it was used to support the budgetary deficit, to support budgetary revenue. Last year when we were the receiver of the funds, it was used to support the exchange rate," he said.

In all, the central bank spent $9 billion in order to support the exchange rate during a crisis last year, he said.

The IMF and Russia recently reached agreement on a $4.5 billion payment, of which $640 million was to be paid in September.

The IMF has said it has found no evidence so far that any of its loans were misused, but there have been reports in western papers that some money might have been diverted into a money laundering scheme.

If the IMF board delayed clearing the next tranche of a loan to Russia, Gerashchenko said: "Nothing will happen to the central bank. But definitely the ministry of finance will have temporary difficulties with fulfilment of their obligations."

He added the amount of money that the IMF was providing over a period of 15 months was "less than the amount we need to pay them back on maturities."

He said that "probably if the decision by the board of directors (of the International Monetary Fund) is not taken by the 20th of September -- (there) should be some additional negotiations, then the board of directors in October will make one decision or another -- then probably the ministry of finance, like last year and the first half of this year, will borrow some funds from us in order to repay their external obligations."

He added that Russian eurobond debt would be paid "always."

From wire reports.

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