Professor Richard Layard, former Kremlin adviser, says the crisis is very dangerous for Russia and the rest of the world

"The Central Bank has enough reserves", the president said after an emergency meeting on the economy with Prime Minister Sergei Kiriyenko, Finance Minister Mikhail Zadornov and Central Bank chairman Sergei Dubinin.

On Wednesday, Moscow residents had queued at exchange booths to convert their roubles into dollars

Russia's government is plagued by a cash-shortage, which has upset the financial markets and undermined confidence in the stability of the rouble. In order to fill the government's coffers, Yeltsin signed a decree on Tuesday ordering deep cuts in federal spending and measures to increase revenues, including income tax.

The president said the government should "strictly enforce" his decree and warned that "several heads will roll" at a meeting on Friday of the emergency tax commission, the body set up two years ago to boost feeble government revenue collection.

On Thursday morning, the Russian rouble strengthened in its primary trading session on the Moscow Interbank Currency Exchange (MICEX).

US plead for 'prompt' IMF help

The American Deputy Treasury Secretary Larry Summers said he was hopeful there would be "prompt" agreement on measures to unblock $670m in IMF aid to Russia.

The money was frozen to force Russia to institute budget cuts and other economic reforms, and is part of an overall IMF economic assistance programme.

BBC correspondent Alan Little reports on Russia's day of economic crisis

Central bank bid to stabilise rouble

The government's emergency meeting came a day after the central bank tripled interest rates to 150% in a desperate attempt to calm financial markets and prop up the rouble.

Amid fears of an south-east Asian style economic collapse, the stock market slumped to its lowest level for two years and analysts warned that unless the West provided immediate financial support, the situation could spiral out of control.

Panic selling

The panic selling of shares and Russian roubles provoked fresh doubts about President Yeltsin's economic reforms.

'No devaluation'

The government had backed the bank's action to increase interest rates.

On Wednesday, Prime Minister Sergei Kiriyenko told a news conference that there would be no devaluation of the rouble, a move he fears could see a return of high inflation, and further loss of investor confidence which would plunge Russia into political as well as economic turmoil.

Professor Richard Layard, former Kremlin adviser, says the crisis is very dangerous for Russia and the rest of the world

During the past two weeks, Russia's central bank has already had to raise interest rates twice, first to 30% and then to 50%.

They are now at their highest level since February 1996, when the country was suffering from high inflation.

Rouble will not be devalued

The central bank announced the latest rate rise saying it "wanted to pour some cold water on market players."

The bank's First Deputy Chairman, Sergei Aleksashenko, said he expected the actions to have an impact on the market on Thursday, when regular securities trading resumes.

The IMF has applauded the move along with government plans to slash its planned budget spending by $6.5bn.

A senior official from the IMF is due in Moscow to discuss a resumption of its $10bn loan progamme.

But opposition parties are not so confident.