Reports have placed the size of the loan -- called an Extended Financing Facility -- at between $9 billion and $15 billion, although IMF officials declined to comment on an amount.
The current IMF mission could last two weeks or longer, according to Thomas Wolf, head of the multilateral lender's Moscow office. He did not rule out the possibility of reaching an agreement on the loan during current negotiations.
"It's anybody's guess whether the mission will go on longer [than two weeks] in order to conclude, or whether there will be a pause," Wolf said. "At this point in the negotiations it's impossible to know how long it will take."
The money would go to supplement an existing $6.5 billion loan approved by the IMF in April and aimed at plugging Russia's 73 trillion ruble ($16.2 billion) budget deficit for 1995. That loan is being dispensed in monthly $500 million tranches and is due to be completed in March.
While the current one-year loan targets macroeconomic stabilization, a three-year loan also would funnel money toward structural reforms in areas such as banking, securities and taxes, and to industrial sectors such as agriculture.
Economists and Russian officials have said that resolving an ongoing dispute between the government and the State Duma, or lower house of parliament, concerning the 1996 draft budget is key to winning approval of the loan.
Currently, Duma leaders are accusing the government of forecasting an unrealistic inflation rate of 1.2 percent a month for proposed budget.
In turn, the loan is likely to influence Russia's success at rescheduling up to $110 billion in old Soviet debt owed to commercial and governmental lenders, payments on which could otherwise torpedo budget projections.
The loan would also serve as an important vote of confidence for foreign investors, one economist said, as well as provide an important source of external financing to a nation struggling under budget cuts and rising interest rates on government bonds.
"The worst problem [Russian officials] are facing right now, I think, is the way they are lowering their budget deficit by issuing T-bills and by reducing expenditures," said Brigitte Granville, a senior research fellow with the Royal Institute of International Affairs.
"You wonder how long they will be able to do that," she said, adding that some economists view Russia as a nation rich enough in natural resources to forgo loans from international lenders.
"It's probably true in the long run, but in the short term I think this money is important," she said.
Should IMF and Russian officials successfully conclude their talks, the Russian officials would issue a statement of intended economic policy, spelling out what they plan to achieve and how they will achieve it. IMF officials would take that statement to their executive board of member countries, which would vote on whether to disburse the loan.
The loan is structured so that during its three-year life, targets and objectives can be altered as needed, Wolf said.
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