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Russia: Kiriyenko Says Government Can Pay Off Debt Despite Rocky Markets

Moscow, 13 August 1998 (RFE/RL) - Prime Minister Sergei Kiriyenko today said there were no economic grounds for a slump in Russia's financial markets.

Kiriyenko described what was happening on the markets as "a psychosis." And he said the government was in a position to ensure full payment on its debt.

Trading was also briefly halted today on Russia's stock exchange after the main index dropped more than ten percent in early dealings. The ruble also continued to weaken, despite a move yesterday by the Central Bank to restrict dollar-buying by commercial banks.

U.S. financier George Soros, in a letter to the Financial Times, said turmoil on Russia's financial markets has reached "a terminal phase" and he urged a devaluation of the ruble. Russian officials have repeatedly ruled out devaluation and the Central Bank today rejected Soros' call.

Kiriyenko, speaking after a meeting with Communist party leader Gennady Zyuganov, said the only way to calm the markets was for the government to strictly implement its anti-crisis program. He again urged lawmakers to break their summer recess to approve austerity bills.

A Duma spokesman said the leadership of the chamber will decide on Monday whether to convene a special session later this month. Zyuganov indicated his party would most likely agree to holding the session.