Journal Issue

De Rato warns Russia against relaxing fiscal policy

International Monetary Fund. External Relations Dept.
Published Date:
November 2004
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During a November 17-18 visit to Moscow, IMF Managing Director Rodrigo de Rato counseled President Vladimir Putin to fully save Russia’s windfall oil revenues. “We support the prudent budgetary policy pursued by the Russian authorities in recent years, in particular the saving of oil revenue windfalls. This cautious policy has prevented overheating and helped preserve competitiveness,” de Rato told President Putin during his two-day visit. Pointing to the need to slow inflation, he advised the Russian government against relaxing the 2005 budget. By continuing to channel windfall oil revenues into the stabilization fund, the government could slow down the appreciation of the ruble, which would free monetary policy to focus on lowering inflation, he said.

De Rato also encouraged President Putin to use oil revenues to repay external debt ahead of schedule, as proposed recently by the Russian finance ministry. According to the Russian news agency ITAR-TASS, President Putin told de Rato during their discussion that he was considering the early repayment of loans owed to the IMF and the Paris Club. With outstanding loans amounting to $3.7 billion, Russia is the IMF’s fifth largest debtor.

Please refer to Press Release No. 04/244, available on the IMF’s website (, for more information.

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