Use of IMF Funds in Russia, A Letter to the Editor, By Thomas C. Dawson, Director, External Relations Department, IMF

August 19, 2004

Use of IMF Funds in Russia
A Letter to the Editor
By Thomas C. Dawson, Director
External Relations Department, IMF
Published in The Times
August 19, 2004


One cannot help having a sense of deja vu reading your report (August 16) on Russia and the IMF. Allegations have been made repeatedly that IMF money was misused during the Russia crisis of 1998. So it is worth repeating once again: there is absolutely no evidence that IMF disbursements to Russia were diverted.

There were a number of investigations of the IMF transfers of money to Russia, including the independent review conducted by PriceWaterhouseCoopers cited in your report. These investigations traced the money from the IMF accounts at the New York Federal Reserve into the Russian Government's accounts at the New York Federal Reserve and into Russian and non-Russian commercial bank accounts at the New York Federal Reserve. It was determined that individual transactions were then disbursed in quantities that were used to support the rouble in a fixed exchange-rate regime, which ultimately collapsed. But IMF support for an exchange-rate regime is an entirely legitimate purpose. The investigations show there is no evidence that the money was misused.

Your claims that the IMF loan "was supposed to be placed with Russian private banks" and that the funds were transferred to a bank in New York "which should not have received them" are false.


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