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Crunch time for Russia
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January 30, 1999: 1:41 p.m. ET
PM Primakov says talks with IMF 'not going smoothly'
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DAVOS, Switzerland (CNNfn) - Talks between Russia and its creditor banks have reached a critical stage, but Prime Minister Yevgeny Primakov said Saturday that major roadblocks still remain.
Primakov told a packed meeting of business leaders at the World Economic Forum in Davos, that "although I hope to hammer out a deal…these negotiations are not going smoothly.
The prime minister said he was going to sign a memorandum Monday responding to questions the IMF had asked. However, he admitted he is not anticipating a warm response from the fund.
Russian bankers are also talking to organizations such as the London Club, which represents banks and investors who bought Russian government bonds prior to last August's financial collapse. Those investors are likely to get only a fraction of their capital back.
On a more positive note Primakov said great effort is being put into eradicating the chronic non-payment of tax which has helped blight Russia's government finances. He pointed out that 50 percent more tax revenue had been collected in January than in January 1998. That extra cash will go toward paying off defaulted Russian debt.
Primakov also made clear he was determined to prevent the ruble, Russia's currency, from bouncing around. "We want to make sure there are no violent fluctuations in the dollar/ruble rate," he maintained, "we need to prevent the capital drain from Russia."
-- by staff writer Rod Cant.
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