The money is part of a $9.2bn IMF loan promised to Russia, but the latest tranch had not been released for several months because of disagreements over Russia's economic reform programme.

Michel Camdessus, the IMF's managing director

The IMF's Russia expert, John Odling-Smee, told a news conference he did not believe Moscow would have any problem seeking support at home or abroad, and that Russian markets would soon stabilise.

This week the Russian government agreed on drastic budget cuts to get public spending under control, on a renewed drive to privatise state enterprises, and on measures to improve tax collection, all steps which the IMF had called for.

Mr Odling-Smee praised the government's action plan. He said the IMF could make the money available before the end of June. However, he said the IMF would not prepare an extra package to back up Russia's deteriorating currency reserves.

Rouble down, rouble up - it was a rollercoaster week

The IMF's decision comes after a week of turmoil on Russia's financial markets, which appeared to threaten the political survival of both the country's yound and unexperienced Prime Minister, Sergei Kiriyenko, and President Boris Yeltsin.

While the Moscow stock market crashed there was a run on the Russian rouble, while the government had to cope with a cash crisis. The central bank raised the interest rate three times within 10 days. Last Wednesday, it tripled the rate to 150%, the highest level since two years.

This countered rumours that the government was contemplating a devaluation of the rouble. However, the central bank now has used up nearly half its available foreign cash since Russia's markets began to wobble last October.

Experts said that the Russian economy could have collapsed completely had the government failed to contain the crisis.