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Monday, August 24, 1998 Published at 13:57 GMT 14:57 UK

Business: The Economy

Russia in Freefall:
Chronology of a Crisis

The Russian economic crisis accelerated as the new government took office this spring. Here are some of the key events that led to devaluation.

  • November 1997

    Russian market begins falling in response to Asian crisis and Western market sell-off.

  • March 23, l998

    President Yeltsin sacks Chernomyrdin government and appoints Sergei Kiriyenko - a banker relatively unknown to the West - as new prime minister. The Duma only approves him one month later after threatened with dissolution.

  • April 29, l998

    Kiriyenko cabinet announced to lukewarm market reaction.

  • May 12, l998

    Coal miners strike over unpaid wages, blocking the Trans-Siberian Railway. Markets fall after law is passed restricting foreign ownership of UES, the biggest electricity company.

  • May 26, 1998

    Auction of the state oil company Rosneft fails to attract any buyers. President Yeltsin signs austerity package to cut budget deficit.

  • June 18, l998

    IMF delays next tranche of its loan to Russia, saying the government is not doing enough to collect taxes.

  • June 19, l998

    Russian government asks for an additional $10-$15bn from the IMF to stave off financial collapse.

  • June 23, l998

    Government presents Duma with emergency anti-crisis plan to raise taxes.

  • July 13, 1998

    IMF co-ordinates an additional $22.6bn in loans to Russia from international lenders. Shares rise on the news.

  • July 19, l998

    Government declares an increase in land taxes after Duma fails to pass many of the anti-crisis tax measures the previous week.

  • August 13, 1998

    International speculator George Soros says Russia must devalue immediately to save system from collapse. Central bank says liquidity crisis could paralyse banking system.

  • August 14, l998

    President Yeltsin says that Russia will not devalue, and refuses to return to Moscow from holiday. IMF flies into Moscow at the weekend.

  • August 17, l998

    Russian central bank widens intervention bands for rouble to 9.5 to the dollar, effectively allowing devaluation. Payment on short term commercial debt and Russian government domestic debt also suspended pending restructuring. Shares plummet and the rouble falls.

  • August 19, l998

    Government delays announcement of debt rescheduling after Western banks object to less favourable treatment than Russian nationals. Yeltsin economic advisor Alexander Livshits resigns.

  • August 21, 1998

    Duma returns for special session, calls on President Yeltsin to resign. World markets fall on fears of instability.

  • August 23, 1998

    Yeltsin sacks entire Kiriyenko government and recalls Viktor Chernomyrdin, former Prime Minister.

  • August 24, 1998

    Boris Yeltsin says new acting PM Chernomyrdin should be considered his successor. Duma refuses to confirm him immediately.

  • August 25/26, 1998

    Rouble falls sharply and trade in the currency has to be suspended as it loses some 40% of its value against the German mark.

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