Actions in Financial, Budget Areas

• Pages: 275

Page 275

On August 17, the Russian government announced a set of measures designed to bolster confidence in the areas of financial and budget policy. These included a widening of the exchange rate band for the ruble, under which the currency will be set at the level of 6.0-9.5 rubles to the dollar; a restructuring of government debt; and temporary restrictions on capital payments abroad (see text of announcement below). Following these actions, IMF Managing Director Michel Camdessus made the following statement, which was released in Moscow.

"On July 20 the IMF's Executive Board approved additional financial assistance to Russia of $ 11.2 billion in support of a strengthening of Russia's economic program. Implementation of this program has been satisfactory. Despite this, confidence in financial markets has not been reestablished and as a result Russia has continued to lose reserves, and asset prices have fallen sharply. In view of the risks implied by the persistence of these trends, the Russian government has announced a set of measures designed to bolster confidence, including a change in exchange rate policy, restructuring of government debt, and a temporary restriction on capital payments abroad.

"These measures and their potential impact will immediately be analyzed by the staff and management of the IMF, and...