Friday, August 14, 1998 Published at 05:34 GMT 06:34 UK
Business: The Economy
G7 words calm Russia's markets
Share prices in Moscow rebound from Thursday's dramatic slump.
The markets reacted to comments by a US official, who had said that the G7, the world's seven richest countries, had not given up on Russia yet.
Before the markets opened, the Russian president, Boris Yeltsin ruled out a devaluation of the rouble and called on the Duma, the lower house of the Russian parliament, to convene for an extraordinary session next week, to deal with the crisis.
But volumes were thin and traders said the shares had soared as a result of the concern expressed by White House spokesman Michael McCurry.
"The international community has a big stake in seeing that Russia gets their economy moving in the right direction," Mr McCurry said, noting that Group of Seven deputy finance ministers had discussed the crisis.
On Thursday, trading on the Moscow stock exchange had to be suspended after share prices lost more than 11% within one hour. Since the beginning of the year, the Russian equity market has shed more than 80% of its value.
He blamed the recent crisis on a "new wave of global market troubles."
Mr Yeltsin also signed an urgent appeal to members of the Duma, the lower house of the Russian parliament, to convene for an extraordinary session next week, to deal with the crisis.
The move was announced by the Kremlin, which said Mr Yeltsin wanted members to examine what it called stabilisation projects drawn up by the government.
Mr Soros, one of the world's most influential investors, wants the rouble to be pegged to the US dollar or a European currency.
In a letter to the Financial Times newspaper, he also called on the Group of Seven industrialised countries to provide a further $15bn to shore up confidence in the country's troubled financial system.
He believes that the best way to resolve the crisis is for a 15-25% devaluation of the rouble and the setting up of a currency board.
Mr Soros said devaluation was needed in the wake of the huge decline in oil prices, one of Russia's main exports, and to reduce the amount of reserves needed for the currency board.
And US credit rating agencies Standard and Poors and Moody's Investors Services downgraded Russia's foreign debt - which will make it more expensive to borrow abroad. They both said the outlook remained negative.
Crisis despite bail-out
Russia is facing further economic turmoil despite promise of a $22bn financial bail-out lead by the International Monetary Fund.
Russian shares have collapsed in recent months amid fears that the government will struggle to pay off its debts.
The government has some $20bn in short-term debt that must be redeemed by the end of the year. It has been finding it difficult to collect taxes, especially from the energy companies whose profits have been hit by the fall in the oil price.
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