As concern grew over the stability of the Russian ruble, the Central Bank imposed new rules Thursday on currency trading by commercial banks. Frightened bankers temporarily halted their foreign exchange trading.
Trading also was halted on Russia's main stock exchange after the first 40 minutes because the main index had dropped more than 10 percent. The exchange reopened 35 minutes later.The only potentially positive news for the government was Communist Party leader Gennady Zyuganov's indication that he would, after all, agree to a special parliamentary session next week to consider legislation required for Prime Minister Sergei Kiriyenko's economic stabilization program.
Zyuganov said the party's legislative leaders would consider calling the session at their meeting Monday, the Interfax news agency reported. Late Wednesday, Zyuganov and other lawmakers had said the lower chamber, the State Duma, wouldn't convene unless called by President Boris Yeltsin.
"An absolutely urgent situation has arisen," Zyuganov said. "If there is devaluation of the ruble, a collapse of banks and the impoverishment of the people will follow."
Kiriyenko tried to calm investors with assurances the government would follow through with its austerity plan. He said the only "normal response" to the panic on the markets was the "strict implementation of the government's stabilization program."
The new banking rules, adopted Wednesday night, were not considered very significant, but the fact that the Central Bank felt the need to take new measures contributed to a climate of foreboding in the Russian markets.
Concern is growing that in spite of the government's statements to the contrary, Russia will devalue the ruble despite an influx of cash from the International Monetary Fund.
George Soros, the American investor whose moves are closely watched on international markets, said in a letter to Britain's Financial Times that it was time to devalue the ruble and establish a currency board in Russia.