The Moscow Times cited a second Audit Chamber report which revealed
that the central bank was simultaneously selling dollars for rubles
and extending ruble loans to a few well-connected commercial banks,
thus subsidizing their dollar purchases. The central bank went as
far as printing rubles to fuel this lucrative arbitrage. The dollars
came from IMF disbursements.
Radio Free Europe/Radio Liberty, based on its own sources and an
article in the Russian weekly "Novaya Gazeta", claims that half the
money was almost instantly diverted to shell companies in Sydney and
London. The other half was mostly transferred to the Bank of New
York and to Credit Suisse.
Why were additional IMF funds transferred to a chaotic Russia,
despite warnings by many and a testimony by a Russian official that
previous tranches were squandered? Moreover, why was the money sent
to the Central Bank, then embroiled in a growing scandal over the
manipulation of treasury bills, known as GKO's and other debt
instruments, the OFZ's - and not to the Ministry of Finance, the
beneficiary of all prior transfers? The central bank did act as
MinFin's agent - but circumstances were unusual, to say the least.
There isn't enough to connect the IMF funds with the money
laundering affair that engulfed the Bank of New York a year later to
the day, in August 1999 - though several of the personalities
straddled the divide between the bank and its clients.
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