Putin Tells Kudrin No Loan From IMF

Russia will not borrow discounted loans from the International Monetary Fund in the near future, Prime Minister Vladimir Putin told Finance Minister Alexei Kudrin during a government meeting on Thursday.
Kudrin said the country had the right to borrow as much as $8.8 billion at discounted rates in the form of IMF’s Special Drawing Rights.
Special Drawing Rights, or SDRs, are an international reserve asset created by the IMF in 1969 to supplement the existing official reserves of member countries. At a G20 meeting in London in April, the group authorized the IMF to issue an extra $250 billion of the instruments to fast-track lending to developing countries.
“Do we need these loans?” Putin interjected.
“This is our reserve position in case of another crisis or situation in which we need to ensure the stability of Russia’s balance of payments,” Kudrin responded.
Putin interrupted him, and in a rare outburst directed at the finance minister said, “Alexei Leonidovich, can you hear what I’m asking? Do we need this money or not?”
Kudrin rushed to explain that he had consulted with the Economic Development Ministry and decided that there was no necessity to use the SDRs, as Russia already has significant currency reserves and sufficient market access to loans and that the country is trying to reduce its deficit anyway. The Central Bank said Thursday that the country’s foreign ­exchange reserves stood at $409 billion.
Putin also instructed Kudrin not to participate in financing any SDRs, as the country already has other financial commitments. Instead, he said, Russia must use its influence within the fund to encourage more lending to the Commonwealth of Independent States.
Russia, which currently holds 47 percent of its reserves in dollars, has, along with China, persistently criticized the dollar’s status as the dominant global reserve currency and advocated using SDRs as a potential alternative.