08/14/1998 14:52:19 Chronology of Russian financial crisis
MOSCOW, Aug 14 (Reuters) - Following is a chronology of key
events in Russia's financial crisis, which took a turn for the
worse this week as many banks suffered acute liquidity problems,
stopped trading with each other and failed to meet some
March 23, 1998 - Yeltsin sacks loyal Prime Minister Viktor
Chernomyrdin and the entire cabinet, saying reforms had not been
dynamic enough. He names virtually unknown energy minister
Sergei Kiriyenko as acting prime minister.
Markets, already uneasy over turmoil in other emerging
markets like Indonesia and a slump in world oil prices, were
shocked and many investors retreated to the sidelines amid the
March 27 - Yeltsin formally nominates Kiriyenko as premier
and warns the State Duma (lower house of parliament) he will use
his powers to dissolve it if it fails to approve his choice.
April 27 - Communist-led parliament approves Kiriyenko after
a month of resistance to Yeltsin's nominee.
April 29-May 5 - Russian government line-up announced. The
new cabinet is dominated by reformers. Anatoly Chubais, reform
guru of the previous government, lost his cabinet job but became
head of national electricity company UES. Markets mainly rise
over the whole period, but major investors still sidelined.
May 12 - Coal miners in Arctic north start protests over
unpaid wages, blocking a major railway. They are joined by
miners elsewhere. Shares tumble, mainly on a law restricting
foreign ownership of shares in UES.
May 13 - Russian markets fall further on Asian contagion
amid violence in Indonesia and poor state of Japan's economy.
May 26 - Yeltsin signs austerity package to stabilise budget
and cut spending. Russia suffers a blow as no one bids for a 75
percent stake in Rosneft, the last big oil firm still in state
hands. Finance minister announces spending cuts of $10 billion.
May 27 - Central bank triples key interest rate to 150
percent to defend rouble after t-bill yields soar and shares
May 29 - Influential Russian tycoons pledge to back Yeltsin.
Yeltsin appoints reformer monetarist Boris Fyodorov to head the
June 4 - Central bank cuts key interest rate to 60 percent
from 150 percent in a sign of growing confidence.
June 17 - Yeltsin appoints Chubais as chief debt negotiator.
June 18 - The International Monetary Fund delays an expected
$670 million tranche of its $9.2 billion loan to Russia, citing
problems with implementing reforms, mainly fiscal.
June 19 - Chubais says Russia is seeking additional $10-$15
billion credit package from the IMF and other lenders.
June 23 - Yeltsin and Kiriyenko present anti-crisis plan
consisting of mainly tax laws. Yeltsin says the crisis has
become "so acute that there are social and political dangers".
He tells the Duma to waste no time in passing the laws, hinting
at tough steps if it resists.
June 25 - The IMF approves the release of the $670 million
tranche, but it fails to impress trade and shares fall again.
July 1-2 - Siberian miners start picketing Trans-Siberian
railway, demanding wage arrears and the resignation of Yeltsin
and his government. Shares tumble on overall uncertainty.
July 13 - Chubais announces that international lenders will
provide a total $22.6 billion in extra credits spread over 1998
and 1999. Of this total sum Russia will receive $14.8 billion in
the current year. Shares soar on the news.
July 15-17 - The State Duma guts government anti-crisis
plan, approving measures which Kiriyenko said would provide only
a third of targeted revenues. He vows to compensate for this
through government resolutions and presidential decrees.
July 19 - Yeltsin vetoes reduction in excise taxes in oil
and a reduction in profit tax and decrees four-fold hike in land
taxes after Duma rejects much of revenue-raising elements in
July 20 - IMF approves $11.2 billion new loans for Russia,
saying first tranche of $4.8 billion available immediately --
$800 million less than planned due to delays in implementing
July 24 - Central bank cuts refinancing rate to 60 from 80
percent. Markets remain unimpressed.
July 29 - Yeltsin cuts short his holiday and flies to Moscow
citing "urgent business" prompting fears of cabinet reshuffle.
But he replaces only Federal Security Service chief.
Aug 4 - Yeltsin resumes vacation at Valdai lakeland.
Aug 6 - World Bank approves $1.5 billion structural
adjustment loan for Russia, including immediate $300 million.
Aug 10 - Miners lift rail blockade after a temporary deal
with the government. Shares fall and t-bill yields rise as
investors take money out of Russian markets amid fears of
devaluation and doubts over state finances.
Aug 12 - Central bank says interbank market virtually
paralysed by liquidity shortages and lack of confidence. It
decides to impose limits on purchases of foreign exchange by
banks and says will act to prevent crisis from spreading.
Aug 13 - International financier George Soros advises the
Russian government to devalue rouble and introduce currency
board, pegging rouble to dollar or euro. Central bank official
says devaluation would not help solve crisis.
Shares plunge to lowest levels in more than two years and
short-term t-bill yields soar as banks dump paper for roubles.
Central bank expands banks' access to overnight credits.
Kiriyenko says there no economic basis for decline in
markets and his government is in position to meet obligations.
Aug 14 - Shares rebound and debt market stabilises after
plunge. Yeltsin, on visit to Novgorod, rules out devaluation and
gives backing to Kiriyenko. He says he will not cut short his
vacation and urges parliament to hold special meeting to
consider government anti-crisis drafts.
Russia's big Communist opposition bloc backs Yeltsin's call
for an extraordinary summer session of parliament, saying it
should focus on the current crisis.