Welcome to the club gogogo : - ). Now Where's Yeltsin???????????
Moscow desperate to head off panic run on banks by citizens
Yeltsin is lying low as the crisis grows, writes James Meek
Friday August 21, 1998
Amid fears of a run on Russian banks by panic-stricken savers, the government offered citizens a "100 per cent guarantee" yesterday that their accounts were safe.
Financial uncertainty was matched by political worries as another day passed without a sign of the country's leader. President Boris Yeltsin has not been seen in public since the economic crisis began in earnest this week.
As concern about the reliability of the inner sanctum of the stricken Russian banking system - Sberbank, the main savings bank - grew, the central bank chairman, Sergei Dubinin, pleaded with savers not to rush to cash in their rouble and dollar accounts.
"The central bank is appealing to citizens to walk calmly through the difficult trials of the financial crisis and not to rush to transfer deposits and withdraw funds," he said.
"The [central bank] intends to cover individuals' deposits in credit organisations with a 100 per cent state guarantee."
Russians are bound to wonder how reliable such a guarantee is, coming from a state which four days ago defaulted on a large part of its debt.
Besides, Mr Dubinin's pledge relies on Sberbank taking over accounts from commercial banks which get into trouble, and assumes that the government is able to support Sberbank itself.
Sberbank, the only retail bank of any size in Russia, with branches in every town and city, holds about 80 per cent of private bank deposits. Unlike most other banks, it is still allowing account holders to make hard-currency withdrawals, but there are signs that it is coming under pressure.
One double-glazing saleswoman with $10,000 (œ6,250) deposited in different commercial banks told the Guardian yesterday that it was possible to withdraw the money via Sberbank, but only if one had an acquaintance working there who could be bribed.
Although the rouble steadied on the currency exchanges yesterday after Monday's official devaluation, there was no relief for Sergei Kiriyenko's government from the relentless political and financial pressure in Moscow.
Mr Kiriyenko was due to meet foreign commercial lenders to thrash out a compromise on the government's plans to cut the value of these investors' Russian bonds.
With a sizeable hole knocked in the asset portfolios of some Western banks and finance houses by Russia's decision, there was fury earlier in the week when it transpired that Mr Kiriyenko intended to offer domestic bond holders better terms than foreign holders.
More information about the scale of the problem facing Russia emerged yesterday when Mr Dubinin's deputy, Sergei Alexashenko, said that up to $4.5 billion (œ2.8 billion) had left the impoverished country legally since May as panicky foreigners sold bonds and called in their loans to Russian commercial banks.
Mr Kiriyenko said yesterday that if the government had not let the rouble slip and frozen debt repayments on Monday, it would have been forced into a full default.
"We're not going to refuse to return this money to [foreign investors], but act together to calmly and thoroughly analyse the real opportunities we have," he said.
But with parliament due to hold an emergency session to discuss the financial crisis today, there was no sign that Russian politicians have the will or sense of common purpose needed to turn their raging words against Mr Kiriyenko and Mr Yeltsin into action to remove them.
Grigory Yavlinsky, leader of the liberal Yabloko party, scorned both the new prime minister and Mr Chernomyrdin, who headed the government for five years.
"The Chernomyrdin government dug the pit and the Kiriyenko government jumped into it," he said.
Any political initiative that exists seems to lie with the alarmingly silent Mr Yeltsin, still sequestered in his country residence outside Moscow - officially on holiday during one of the greatest crises of his presidency.
The president is due to fly to the Arctic today to attend a naval exercise by 15 ships of the Northern Fleet, during which every weapon in the naval arsenal, including an intercontinental ballistic missile, will be fired for his delight. He has already cost the cash-starved navy untold millions by cancelling an earlier trip at the last minute.
The financial crisis distracted attention from Mr Yeltsin's odd behaviour on a trip to Novgorod on Friday, when journalists following him said he appeared emotionally unstable and not fully aware of what was going on around him.
Yelena Dikun of Obshchaya Gazeta described yesterday how at various points during his city tour Mr Yeltsin smiled like a child, not understanding what was being said to him; fell into what seemed to be a trance; suddenly flew into a rage; covered his face with a handkerchief and seemed to have difficulty breathing; and was rushed away from journalists.
In his final meeting with the people of Novgorod, wrote Ms Dikun, Mr Yeltsin needed to be supported by his bodyguards and his wife, Naina, before getting into his armoured limousine and immediately lying down.
reports.guardian.co.uk |
