After Wednesday's crash, both share prices and the rouble recovered. Moscow's RTS shares index closed 6.14% higher at 198.74, clawing back half of Wednesday's losses, and the rouble was fixed at 6.1490 per dollar against 6.1750 the day before.

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

President Yeltsin made his statement after an emergency meeting on the economy with Prime Minister Sergei Kiriyenko, Finance Minister Mikhail Zadornov and Central Bank chairman Sergei Dubinin.

But Russia's government seems to be divided whether it is strong enough to master the crisis in the long run.

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

Leading Western investors, who met with Deputy Prime Minister Viktor Khristenko, said the government hoped to receive international financial support.

Russia is already waiting for the International Monetary Fund to release the next $670m loan tranch of a $9.2bn extended fund facility to prop up the country's economy.

However, Russia's Deputy Finance Minister, Oleg Vyugin, told journalists that this sum may not be enough. He said the loan "undoubtedly does not solve our problems. If we are talking about any support it must be on quite a different scale."

But Mr Dubinin, the central bank's chairman, said Russia could do it alone: "We are convinced that we will not only be able to cope with the situation, but that we will resolve it with radical measures and there will be no such problems again in Russia."

IMF praise, not money

In a move to reassure the Russian markets, the IMF's Managing Director, Michel Camdessus, said the central bank in Moscow was doing a "good job".

He stressed the bank had fulfilled its share of an economic programme agreed with the IMF, and said he was also pleased with the government's new programme to raise revenues.

But a senior IMF official, who has just arrived in Moscow, dismissed reports that the fund was preparing a special rescue package to support the rouble.

Fighting the budget deficit

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.

Rouble will not be devalued

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 one day after the central bank tripled interest rates to 150% in a desperate attempt to fight market rumours that the rouble was about to be devalued.

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.