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Russia: Stocks Tumble, Ruble Dives, Unions Raise Demands

Moscow, 19 August 1998 (RFE/RL) - Russian stocks tumbled by almost 10 percent today to their lowest levels in more than two years as the ruble continued to fall in the wake of Monday's de-facto currency devaluation and default on some foreign debt. Russia's central bank chairman Sergei Dubinin announced today the bank has already spent the $3.8 billion the IMF loaned it last month to prop up the ruble. He says an additional $1 billion from the IMF was siphoned off by the finance ministry to pay off government debt.

The central bank today also moved to block banks and exchange offices from getting windfall profits by ordering to limit their currency exchange margins to 15 percent.

The head of the Association of Russian Banks, Sergei Yegorov, urged the government to take measures to calm people and restore confidence in the banking community.

Meanwhile, the chairman of Russia's Federation of Independent Trade Unions, Mikhail Shmakov, demanded that $10 billion in wage arrears to workers be indexed in line with the devaluation. He reiterated threats of a nationwide strike on October 7.

Newly-appointed Deputy Prime Minister Boris Fyodorov says details of the terms of government plans for restructuring short-term domestic debt, originally due to be made public today, will not be issued until next Monday.

International investment bank Credit Suisse First Boston issued a statement today saying the moves being considered could discriminate against foreign investors, trigger more defaults, permanently damage private financing of Russian reform and destabilize other emerging markets.

The Kremlin says President Boris Yeltsin, in the fifth week of his summer holiday, has no immediate plans to comment publicly on the crisis.