Ministry of Finance of the Russian Federation
Ministry of Finance of the Russian Federation
11.04.2011

Interview of Deputy Finance Minister of the Russian Federation S.Storchak to "Reuters"

 

Belarus loan talks in very early stages-Russia

MOSCOW, April 11 (Reuters) - Moscow is still in the very early stages of considering a possible loan to Belarus, but Minsk could also use privatisation to bolster its coffers and support its currency, a senior Russian official told Reuters.

Belarus -- whose reserves of $4 billion now cover less than two months of imports -- has asked Russia and other former Soviet republics for around $3 billion in loans.

"The talks are in the very, very early stages," Russian Deputy Finance Minister Sergei Storchak said in an interview.

"We are counting on seeing (their) programme and on being sure that the money allocated to financing the financial gap, if there is one, will really be used for the good of the economy."

The comments are in line with previous statements from Russian officials and appear to belie Minsk's hopes to get funding by the end of April -- within the timeframe of the moratorium on further sharp Belarussian rouble devaluation or any additional foreign exchange restrictions.

Minsk was bailed out by the International Monetary Fund in 2009, but has yet to ask the IMF for cash this time, potentially anticipating tougher terms than from Russia.

Storchak said Russia would like to work with other potential lenders and called on Minsk to consider other cash sources.

"The problem of the current account can also be solved with the help of privatisation," he said.

"As I understand it, (Belarus) is ready to go along the path of reducing the state's role in the economy ... This could be a respectable source of replenishing international reserves and, thus, of supporting the national currency."

Belarus plans to sell its 51 percent stake in its local mobile phone joint venture with MTS , Russia's biggest mobile telecoms company, seeking $1 billion.

Also expected to be put up for sale is a 25 percent stake in Belaruskali, one of the world's top producers of potash which has attracted interest from Russia and China.

In deciding on the loan, Russia will consider parameters like domestic and external debt, both corporate and sovereign.

"Today, the debt ratios of Belarus are within the norm. Of course, they will change in case of a devaluation."

Faced with rapidly declining reserves Belarus's central bank recently allowed the Belarussian rouble to devalue by 10 percent from the official rate, but analysts say it remains illiquid and further devaluation may be needed.

 

Russia sees no extra stability measures at G20 mtg

MOSCOW, April 11 (Reuters) - The world's top economies are unlikely to adopt any additional financial stability measures when they meet this week and there is no broad understanding on how to construct a system to curb imbalances, a top Russian official told Reuters.

Finance ministers and central bank governors from the Group of 20 economies meet in Washington on Friday to discuss how to avoid a repeat of the 2008 economic crisis.

"The more probable expectation would be of a confirmation of the G20 path taken a year ago," Deputy Finance Minister Sergei Storchak said in his first interview since being named as the ministry's sherpa to the G20, the G8 and the IMF.

Under France's G20 presidency, officials are set to discuss financial consolidation, overhauling the monetary system, capital controls and restraining the volatility of commodities.

"They (France) are grinding away at achieving concrete results," said Storchak, who negotiated Soviet-era debt repayments in 2005-7 and returned to work last month after an embezzlement case against him was dropped.

NO UNDERSTANDING

A source told Reuters the G20 will try to reach a deal on a combination of models on screening economic imbalances that use a list of indicators agreed in February.

The imbalances come from the huge surpluses of emerging economies, some of which like China keep their currencies from appreciating to bolster the appeal of their exports. On the flip side, developed nations are in deficit, struggling to compete on price while their wealthy consumers snap up foreign imports.

The G20 is working to try and discourage countries from posting excessive current account gaps in either direction.

But Storchak, an ally of veteran Finance Minister Alexei Kudrin, said that the guidelines were in the very early stages.

"Honestly, I don't really understand how on the basis of these general collected data it will be possible to take any policy measures," he said.

"For governments, what's important is not the information itself, but to what decision it will lead."

G20 finance ministers meeting in Nanjing, in China, in late March agreed that there was a "grain of rationality" in the discussion on the guidelines, Storchak said, but it was still unclear in which direction the pendulum would swing.

"For now there is no understanding," he said.

YUAN WELCOMED IN SDR BASKET

Storchak said that Russia supports the idea of including the Chinese yuan in the basket that makes up the Special Drawing Units (SDR), the IMF's in-house money. But to qualify for inclusion, it would first need to become freely convertible.

"If the goal of including the yuan in SDR means a parallel movement of achieving another goal -- of a freely convertible yuan, then I think that this movement can only be welcome."

Storchak said the rouble should be included in the SDR basket alongside the dollar, the euro, sterling and the yen.

Storchak, who is also expected to be put in charge of Russia's sovereign debt management, said Russia was interested in investing some of its $500 billion reserves in the bonds issued by the European Financial Stability (EFSF).

"It would only work to the benefit of diversification of the asset structures of the central bank ... and of the assets in which two sovereign funds are invested," Storchak said.

Russia holds the world's third-largest reserves and has two oil wealth funds, the Reserve Fund and the National Welfare Fund, which have been accumulating oil windfall revenue.