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Politics : Clinton -- doomed & wagging, Japan collapses, Y2K bug, etc
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To: SOROS who wrote (780)11/16/1998 9:32:00 PM
From: SOROS  Read Replies (1) of 1151
 
720 Banks Are Doomed

ON THE EVE OF DEFAULT, THE RUBLE IS BECOMING CHEAPER

Summary

The ruble-dollar exchange rate was unstable over the past week, and had reached 19 rubles by its end.

Even the new order of the central bank, which imposed restrictions on banks' foreign-currency purchases during the special morning
sessions, could not put a stop to the ruble's devaluation. The daily wrote that there were two main reasons for this: the approach of
the end of the debt moratorium; and the publication of official figures for the federal budget for the last quarter of this year. It appears
that minimum budget spending will be at least two times higher than possible revenue.

Banks have bought a lot of dollars in the hope of paying off foreign creditors, at least partially. However, this will not save most of
them, the daily wrote. Recently, central bank first deputy chairman Andrei Kozlov noted that 720 banks may be closed under the
government's plan to restructure the banking system. This is almost half the total number of banks in Russia. The central bank,
however, did not disclose the list of problem banks' names. According to Kozlov, the central bank would have to spend $8.6 billion
to save all Russia's banks, and it does not have this money.

The daily concluded that about 32 percent of individuals' deposits are held in the 720 banks that are to be closed. This money, an
estimated 35 billion rubles, will probably be lost, it concluded.

about N E Z A V I S I M A Y A G A Z E T A (circulation 52,000) This daily is controlled by financial magnate Boris Berezovsky. It is
respected for its thoughtful and well-written articles and often includes unique comments or reports the other papers miss. However,
critics sometimes complain it serves Berezovsky's interests. russiatoday.com

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