An agreement between the government and the independent Central Bank aims to cut inflation almost in half and severely restrict subsidies to failing state enterprises, Russia's finance minister said Tuesday.
Minister Boris Fyodorov said the agreement signed over the weekend seeks to limit monthly inflation to no more than 10 percent, while both sides agreed to a goal of 5 percent. In April, the rate was 17 percent.
Last year, inflation topped 2,500 percent.
The agreement also clears the way for a $3 billion loan from the International Monetary Fund.
The government had accused the bank of fueling inflation with its generous credits to outdated factories and other enterprises. The bank, which is responsible for printing money and issuing credits to commercial banks and state enterprises, warned that the government's plans would lead to unemployment and throw the economy into chaos.