Thursday, July 23, 1998 Published at 11:54 GMT 12:54 UK
IMF approves Russia loan
Muscovites check the state of the rouble against other currencies
The International Monetary Fund has approved the first instalment of a financial aid package to shore up the ailing Russian economy.
A BBC correspondent says the shortfall could be seen as a "punishment" for the Russian parliament's failure to approve the full set of economic reform measures demanded by the IMF.
Securing the rest of the loan is conditional on Russia continuing with market reforms. The full financial aid package, if approved, will be worth $22bn to Russia.
The IMF's executive board approved the loan after the Russian Government promised the IMF that it would cut its budget deficit by improving tax collection and restructuring the country's growing debt.
The promise came in a memorandum signed by the Prime Minister, Sergei Kiriyenko, and the chairman of the Central Bank, Sergei Dubinin.
Russia collects only a small fraction of the taxes it is owed, and improving tax collection was one of the IMF's requirements leading to the release of funds.
But he also warned that the loan would not in itself be a solution to Russia's economic problems.
"Only the state powers will be able to fix all the problems in the Russian economy and nobody else. It's they who must take serious measures, including unpopular measures," Mr Chubais said.
Rule by decree
Last week, the Russian parliament failed to approve key elements of an austerity programme demanded by the IMF.
Prime Minister Kiriyenko responded by threatening to rule by decree.
Then on Sunday, President Yeltsin vetoed two laws passed by parliament to lower taxes and introduced new land taxes by decree.
Our correspondent says the IMF's approval of the greater part of the loan will be interpreted as a personal victory for the president.