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Last Updated: Monday, 21 August 2006, 11:55 GMT 12:55 UK
Russia pays off Paris Club debts
Priobskoye oil field in western Siberia
Russia's enormous energy wealth is improving its public finances
Russia has finished paying off its $22.5bn (12.4bn) Soviet-era debt to the Paris Club of international sovereign creditors ahead of schedule.

Its huge oil and gas wealth has allowed it to fast-track the repayments, and this has saved $7.7bn servicing costs.

Moscow also agreed to pay a $1bn premium to certain creditors in compensation for lost interest.

Some, including Germany, had objected to Russia repaying its debt in one lump sum because they would miss out.

The move will cut the debt burden inherited by Russia from the Soviet Union by more than 90% to $3bn.

The Paris Club consists of 19 members including the US, UK, France and Japan.

A default on the debt, built up during the life of the Soviet Union, triggered a Russian financial crisis in 1998.

Earlier, economists said the move would boost Russia's sovereign credit rating, which could help attract inward investment.




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