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Russia: Markets React Poorly To Ruble Devaluation

Moscow, 18 August 1998 (RFE/RL) -- Russian markets reacted poorly to yesterday's decision by the Central Bank to effectively devalue the ruble and default on its treasury debt. The benchmark Russian Trading System Index dropped almost 9 percent by late afternoon. This sharp drop came on top of yesterday's 5 percent fall.

The ruble lost 7 percent of its value in interbank trading but as much as 30 percent at currency exchanges around Moscow.

International agencies also reacted swiftly to the government's measures by slashing Russian national, regional, and institutional credit ratings across the board.

Russian Communist Party leader Gennadii Zyuganov said today that his party will call for President Boris Yeltsin to resign at Friday's session of the lower house of parliament. Zyuganov said Yeltsin had "devalued himself" and "cheapened the country."

Aleksandr Lebed, a likely presidential candidate and regional governor, called today for a special session of the upper house of parliament to discuss the economic crisis. Lebed criticized the government for bringing Russia to a state of bankruptcy.