Japanese Reserving for Loss on Soviet Debt

TOKYO - Japanese banks are preparing to set aside reserves for possible losses on loans to the Soviet Union, banking industry sources here said.

Combined Japanese bank loans to the Soviet Union are estimated to total about $4 billion.

Last week, the Soviet Bank for Foreign Economic Affairs said it was suspending principal payments on outstanding bank debt from Dec. 5.

Japan's Ministry of Finance said Japanese banks are required to raise loan-loss reserves for debt to foreign countries if a debtor nation halts payments of principal or interest for more than a month.

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