Putin says Russia may pay off some of international debt early
(Agencies)
Updated: 2004-11-18 22:19

President Vladimir Putin told the chief of the International Monetary Fund on Thursday that Russia may pay off portions of its international debt earlier than initially planned, Russia news agencies reported.

Russia "has the possibility to settle its debt before the IMF and the Paris Club ahead of schedule," ITAR-Tass and Interfax quoted Putin as saying at a meeting with IMF managing director Rodrigo Rato.

Under the current repayment schedule, Russia is to fully repay its debt to the IMF by 2008, but officials have said it may make the payments by 2006. Taking into account the $1.7 billion US that Russia plans to pay this year, it is to owe the IMF about $2.7 billion as of Jan. 1, ITAR-Tass reported.

Russia's Finance Ministry has recommended early payment of much of the country's foreign debt, using the surplus from a government emergency fund. Most of the debt to be repaid early is to the Paris Club of creditor nations, an informal group of major industrialized countries.

It would be prudent for Russia, which is reaping the benefits of high world oil prices, to settle its debts more quickly than planned to avoid interest payments, ITAR-Tass quoted Rato as saying in an interview before his visit to Moscow.

Russia relied heavily on foreign borrowing as the economy struggled following the Soviet collapse, and its debt to the organization reached a peak of more than $15 billion about five years ago.

Five years of economic growth, fuelled largely by high oil prices, have made the country more self-reliant.

ITAR-Tass quoted Putin as saying earlier that Russia is interested in participating in IMF programs for other former Soviet republics in the 12-country Commonwealth of Independent States. Under Putin, a newly assertive Russia has been seeking to shore up its influence in CIS countries, particularly through economic ties.

Rato told ITAR-Tass that in his first visit to Russia as IMF chief he wants to get an idea of Russian leaders' assessments of the economic situation in the nation and worldwide, as well as their perception of the role of the Washington-based IMF.