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Wednesday, August 26, 1998

Rouble tumbles to new low

REUTERS  
MOSCOW, Aug 25: Russia's rouble suffered its worst fall in nearly four years today as acting Prime Minister Viktor Chernomyrdin scrambled to put together a government.

President Boris Yeltsin, who sacked the entire government on Sunday for failing to end Russia's deep financial crisis, issued an order to the departing government to continue working until the new team was formed.But the rouble fell after Russia's top debt negotiator, Anatoly Chubais, who is influential in the west, said any government indecision now could cause serious new economic damage.

The rouble, allowed to devalue last week, fell 10 per cent to 7.88 from 7.14 to the dollar today after trading was twice suspended -- the worst fall in a single day since plunging on what became known as `Black Tuesday' in October 1994. Ten days ago it was at about 6.2 to the dollar. Russia's Moscow Interbank Currency Exchange (MICEX) said it had restarted trade in the rouble after an earlier suspension, which was caused by a 10 per cent fall from Monday's fix of 7.1400 to the dollar.

The exchange said the rouble had fixed at 7.86 to the dollar. The slide of the currency is the sharpest since it was effectively devalued last week under emergency monetary measures passed by former Prime Minister Sergei Kiriyenko, sacked on Sunday.

The rouble was effectively devalued last week undera raft of crisis monetary measures passed by former Prime Minister Sergei Kiriyenko, who ordered the band in which it is allowed to trade to be widened to 6.0/9.5 to the dollar from 5.27/7.13.

Since then, the rouble has been falling gradually amid a lack of trade and liquidity on the currency market. Tuesday's slide in the rouble/dollar rate is the sharpest since the effective devaluation was announced.

Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.


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