Russian prime minister works to finalize financial bailout

MOSCOW (AP) — Russia and the International Monetary Fund reached agreement Sunday on all key issues of a loan package to rescue the sinking Russian economy, news agencies reported.
Russian officials have been saying for days that an agreement on a $10 billion to $15 billion IMF bailout was imminent, but the amount agreed upon was not disclosed.
Any deal was likely to be conditional on the opposition-led Russian parliament passing key fiscal legislation, including measures to raise taxes that are highly unpopular among lawmakers.
The Interfax news agency reported that Prime Minister Sergei Kiriyenko came to terms on the all principle questions in a meeting with top IMF official John Odling-Smee. Details of the agreement would be disclosed Monday, the ITAR-Tass news agency reported.
The Russian government and Central Bank on one side, and the IMF and World Bank on the other successfully negotiated the principle issues, Interfax quoted a government spokesman as saying.
In addition, the World Bank has agreed to speed talks on a $600 million to $800 million loan that were supposed to be concluded this coming October. The loan would be used to finance structural economic reforms.
Before going forward, both lenders have indicated that they will require passage of fiscal reforms. Lawmakers were expected to hold a special session this week to consider the measures.
Investors began fleeing Russia’s financial markets in May, spooked by a sharp drop in the prices of Russia’s oil exports, a wave of labor protests and general skittishness left over from the Asian financial crisis.
In all, the stock market has lost about half its value since the beginning of the year, and the Central Bank has been spending down its reserves to support the ruble.