Russia's Central Bank has printed almost $66 million in new rubles and issued short-term credits to get cash flowing through the frozen banking system, an official said Monday.
Also, President Boris Yeltsin and Prime Minister Yevgeny Primakov met in the Kremlin with the aim of finalizing the new Cabinet and working out a plan to stabilize the jittery economy.The government's biggest fear now is that Russia's shaky commercial banks will collapse. The Central Bank launched an emergency rescue plan Friday to help ensure that payments would start circulating again.
Russia's financial crisis had caused a backlog of bank payments totaling more than $2 billion, Andrei Kozlov, the first deputy chairman of the Central Bank, told a news conference Monday.
The Central Bank on Friday helped to settle $666 million, or one-third of the total owed between banks and their clients, Kozlov said.
As part of the effort, the Central Bank printed the new rubles and issued short-term credits to banks, Kozlov said. He stressed that the amount was too small to affect the ruble's rate and inflation.
In another development, the Central Bank canceled trading on the currency market Monday, though the ruble continued trading at street exchanges. The Central Bank said it needed more time to determine which banks should be allowed to participate on the currency markets.
"We want to make sure that the banks will use the extra (rubles) to settle their client payments and not to buy dollars," Kozlov said.
Critics have accused the government of responding slowly to the economic crisis which hit last month. The rescue plan for the banks represents the biggest emergency effort so far.
Primakov has been in office 10 days but has yet to outline an overall economic strategy or put his Cabinet in place. Key jobs, such as the finance minister's post, have not be filled.
"We are going to finalize the personnel issue with (Primakov) today," Yeltsin said at the start of his meeting.
The Russian economy has been crumbling over the past month as the currency was devalued, inflation soared, and the country defaulted on its loans.
More bad news came when the State Statistics Committee announced that the gross domestic product shrank 2.1 percent in the first eight months of the year.
The virtual shutdown of the country's banks meant a moratorium on payments of all kinds, from salaries to the purchase of goods and services, and left depositors cut off from their savings.
Shortly after the meeting, Gennady Kulik, a Soviet-era agricultural official and a member of parliament's Agrarian Faction, was named deputy prime minister in charge of agriculture.
Kulik, a defender of collective farms and a staunch opponent of private land ownership, has been among those who have blocked Yeltsin's plans to carry out land reform.
Primakov also named Vice Premier Alexander Shokhin, a moderate reformer, to head Russia's delegation in talks with the International Monetary Fund, Russian news agencies reported.
An IMF mission arrived in Moscow on Friday for a week of talks with Russian officials to follow up on Russia's lending program. The IMF organized a $22.6 billion rescue package in July, but it did not ward off the crisis.