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Last Updated: Friday, 13 May, 2005, 22:33 GMT 23:33 UK
Russia to repay $15bn debt early
President Vladimir Putin and James Wolfensohn of the World Bank in February 2005
Rising oil prices are helping Russia speed up its debt payments
Russia has struck a deal for early repayment of $15bn (8bn) of debt owed to the West since Soviet times.

The money is owed to members of the Paris Club, a grouping of 19 rich lending nations.

The move will help Moscow save $6bn in interest payments that would otherwise have been due by the year 2020.

The payment, which is due to be completed by August, comes four months after Moscow repaid its debts to the International Monetary fund.

In total, Russia owes the Paris Club $44bn (24bn). This deal - the biggest debt redemption in the institution's history - will cut that figure by about a third.

Paris Club members include the UK, France, Germany, Japan, Russia and the US.

Prudence

The deal highlights the transformation of Russia's public finances, thanks to rising oil prices and prudent financial management, BBC business correspondent Mark Gregory reports.

Russia is the world's second-largest crude oil producer and the government has made a point of saving the extra revenues received, our correspondent adds.

Russian President Vladimir Putin had told World Bank president James Wolfensohn in Moscow in February that Russia planned to repay its debts early.

Also in February, Russia paid off the last $3.33bn instalment of a $22bn International Monetary Fund debt.

It was due to complete repayment of this debt in 2008.


SEE ALSO:
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