President Boris Yeltsin went over the head of the International Monetary Fund on Friday and urged Western leaders to support a multibillion-dollar package of financial assistance to defend the Russian currency.
Russian officials say they were now seeking assistance of $20 billion or more, at least $10 billion of which it hopes would come from the IMF.The total is $5 billion to $10 billion more than the government previously said it needed, and the request to the IMF is about twice what the fund has spoken of providing.
The expanded request reflects Moscow's anxiety about a rapidly deteriorating economic situation, which is not only threatening the stability of the ruble but threatening to shake the foundations of Russia's political establishment.
In an extraordinary series of appeals, Yeltsin telephoned President Clinton, President Jacques Chirac of France, Prime Minister Tony Blair of Britain and Chancellor Helmut Kohl of Germany. The Russian president also called Michel Camdessus, the head of the IMF.
The Yeltsin government and the IMF are in some agreement about the overall direction of economic reform but not the pace. The Russians feel that their financial markets are so shaky right now that they face an emergency and cannot afford dragged-out negotiations.
"The situation on financial markets has gotten worse," Prime Minister Sergei Kiriyenko told the upper house of parliament. "Treasury bill yields are rising. Social tension is also growing. We are ready to consider any proposal, but we simply cannot fail to repay treasury bills."
The loans that Yeltsin is seeking would be used for two purposes. The main one is to shore up the reserves of the Central Bank and prop up the ruble. Another aim is to restructure its short-term debt, which Russia has been forced to issue at enormous interest rates.