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Russia: Ruble Drops Again, European Markets Hit By Crisis

Moscow, 27 August 1998 (RFE/RL) - Russia's Central Bank today suspended all future foreign currency trading on the Moscow Interbank Exchange for an undetermined period of time, as the ruble headed into another sharp drop. The stock market also fell by some 5 percent. A key ally of acting Prime Minister Viktor Chernomyrdin told reporters that extreme measures to halt the ruble's slide, including reinstituting price controls and cancelling the convertibility of the ruble, are being considered by the government and the Duma. Aleksandr Shokhin, who heads Chernomyrdin's party faction in the Duma, said the government would try to strike some sort of balance between what he said were urgently needed controls and the demands of a free market.

But German Chancellor Helmut Kohl warned today that unless Russia follows through on market reforms, it will not receive any more financial help from international lenders. Kohl said he will speak by phone about the Russian crisis today to U.S. President Bill Clinton, British Prime Minister Tony Blair and French President Jacques Chirac.

Chernomyrdin has been meeting regional governors in Moscow, including current Krasnoyarsk Governor Aleksandr Lebed, as he attempts to put together a government. Lebed said he would not accept any appointed position in a new government.

ITAR-TASS says President Boris Yeltsin remains at his dacha near Moscow. He sent his spokesman, Sergei Yastrzhembsky, earlier today to hold negotiations with parliamentary leaders, including Communist Party head Gennady Zyuganov, who has repeatedly called for Yeltsin's resignation.

Meanwhile, shares on European markets suffered renewed losses today because of Russia's deepening economic crisis.

In London, the FT-SE 100 index of leading shares fell 1.9 percent. In Frankfurt, the DAX 30 index opened 44.20 points down. And the Paris CAC-40 index of leading shares opened 1.51 percent lower, after shedding almost 3 percent yesterday.

In Central Europe, the Hungarian exchange was down 12 percent, Warsaw stocks fell 6 percent, and share prices were 5 percent lower in Prague.

The European share prices reflected losses in Asia earlier in the day. In Tokyo, Japanese stocks plunged 3 percent today, with the leading Nikkei stock index closing at 14,413.79, its lowest level in six years.