RUSSIA: PRIME MINISTER KIRIYENKO WELCOMES IMF LOAN APPROVAL

• published: 21 Jul 2015
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Russian/Eng/Nat Russian Prime Minister Sergei Kiriyenko has welcomed the International Monetary Fund's approval of the first tranche of an 11.2 billion (b) U-S dollar loan to stabilise the country's floundering economy. Although the initial payment of 4.8 (b) billion U-S dollars is less than Moscow had expected, the financial markets welcomed the decision reached after a long and heated debate in Washington. The Russian government is hoping that the loan will calm the country's troubled financial markets and allow it to introduce a series of economic reforms. It has been a trying time for Russia's young Prime Minister Sergei Kiriyenko. He has spent the past few months battling with Russia's mounting financial crisis. But on Tuesday Kiriyenko greeted the I-M-F's approval of a 11.2 (b) billion U-S dollar stabilisation package as a victory for his fledgling cabinet. The loan staves off the threat of a Russian currency devaluation and the economic and social crisis which would have ensued. And Kiriyenko shrugged off disappointment that the first tranche - 4.8 billion (b) U-S dollars - was less than expected when the I-M-F initially agreed to the loan last week. SOUNDBITE: (Russian) "We got several hundred million dollars less than we initially agreed upon with the IMF. But there'll be little effect on the market because we just managed to borrow an extra five hundred million dollars during our programme to convert government bonds from roubles to their dollar equivalent." SUPER CAPTION: Sergei Kiriyenko, Russian Prime Minister The I-M-F decided to withhold some of the initial pay out after the Duma ignored pleas from the Prime Minister and refused to pass a series of budget-tightening measures which were contingent to the stabilisation loan. Nevertheless the financial markets reacted with cautious optimism to the I-M-F decision. Trading was stable on Tuesday. Financial operators like Charlie Ryan, who is president of the United Financial Group said the move has helped to restore investors' faith in Russia. SOUNDBITE: (English) "I think people were quite surprised last week when they found the IMF were actually going to disperse such a large sum of money so quickly and to the extent that they held a little bit back to try and induce the Duma to approve a few of the tax measures which they did not approve. It was generally greeted by the market as a positive sign." SUPER CAPTION: Charlie Ryan, President United Financial Group The most significant effect was on the rouble itself which rose against all the major currencies on Tuesday, meaning that the government may be able to stop ploughing much-needed reserves into propping it up against speculators. During the economic crisis which has hit Russia in recent months, the government has been unable to pay millions of state workers, like the miners who have been picketing the White House in Moscow for more than a month. They remain unconvinced that the I-M-F deal will bring about a radical change to their situation. SOUNDBITE: (Russian) "I'm 100 percent convinced that all the credit will be used to pay to repay the government bonds. It's just a typical financial pyramid but this time it's been created by the government." SUPER CAPTION: Vladimir Patishiny, miner SOUNDBITE: (Russian) "I doubt that any loans will do any better for ordinary folks in Russia. We've reached the point where financial instruments will not solve the problem. Now we have to replace the government, the president and perhaps the constitution itself." SUPER CAPTION: Vladimir Naumov, miner The miners are not alone in their distrust of the government but at least the loans package has won Kiriyenko and his cabinet time to prove them wrong. You can license this story through AP Archive: http://www.aparchive.com/metadata/youtube/81ab934a10d9d5478752b54b81a1d6b3 Find out more about AP Archive: http://www.aparchive.com/HowWeWork