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Politics : Clinton -- doomed & wagging, Japan collapses, Y2K bug, etc
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To: SOROS who wrote (416)9/21/1998 1:09:00 PM
From: SOROS   of 1151
 
Wall Street Journal - 09/21/1998

MOSCOW -- The Central Bank of Russia Monday canceled electronic trading of the ruble against the U.S. dollar on the Moscow Interbank Currency Exchange as it attempted to restart the country's banking system through additional cash injections.

Russia Acts to Jump-Start Banks; Measure Allows Use of Treasurys

On Friday, the central bank launched a massive operation aimed at offsetting a huge web of nonpayments that had paralyzed the entire banking system. The monetary authority issued billions of rubles in short-term credit and printed 900 million rubles in new cash Friday, a senior central bank official said Monday.

First Deputy Chairman Andrei Kozlov estimated that Russia's financial crisis had caused a backlog of frozen client payments totaling more than 30 billion rubles.

Last Friday, the central bank helped to settle 10 billion rubles of that amount, or one-third of the total owed between banks and their clients. Commercial banks in five major regions, including Moscow, had provided the central bank with data on 20 billion rubles of unsettled payments.

To offer commercial banks credits for the settlements, the banks were ordered by Friday to submit to the central bank information on their overdue payments.

Banks that hadn't done this will be banned from the foreign-exchange market, the central bank said Monday.

However, because the central bank hadn't yet drawn up the list of disqualified banks, all ruble-dollar trading had to be canceled Monday, the central bank said in a release.

In the absence of trading Monday, the official dollar rate will remain at Friday's rate of 16.3818 rubles to the dollar, the central bank said.

In brief spot trading early in the session traders said the central bank's printing of rubles led to an initial selling of rubles.

The central bank said it doesn't think the first emission of new cash will cause higher inflation and declined to say whether another cash injection will take place Friday, when more payment offsets will be carried out.
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