08/26/1998 16:17:20 IMF's Camdessus meets Russian, Ukrainian leaders
WASHINGTON, Aug 26 (Reuters) - The International Monetary
Fund's managing director held surprise talks on Wednesday with
Russian and Ukrainian leaders on the financial crisis gripping
Russia and fallout across the region.
An IMF spokesman in Washington said the fund's managing
director, Michel Camdessus, was meeting with Russia's acting
Prime Minister Viktor Chernomyrdin and Ukrainian President
Leonid Kuchma in Ukraine's Crimea peninsula, against the
backdrop of the deepening crisis and plummeting currencies.
"The purpose of Camdessus's visit is to discuss recent
developments in Russia and their impact on the region,
especially Ukraine," the IMF spokesman said.
Last month Russia clinched a $22.6 billion rescue package
with the IMF and other international lenders aimed at dragging
Russia out of deep economic crisis. But conditions have
deteriorated dramatically since that agreement was reached.
Russia stunned financial markets around the world a week
ago by effectively devaluing the rouble and declaring a 90-day
moratorium on repayment of some foreign credits.
Then Russian President Boris Yeltsin on Sunday fired the
entire government of Prime Minister Sergei Kiriyenko, who had
failed to stem a worsening financial crisis.
Yeltsin named as acting prime minister Chernomyrdin, whom
he had fired in March in a quest for a premier who could inject
new life into economic reforms.
But Chernomyrdin has been struggling to form a new cabinet,
and German Finance Minister Theo Waigel said it was not
possible for the IMF, the Group of Seven industrialized nations
or the European Union to fix Russia's problems.
Russia's rouble plunged more than 40 percent against the
German mark on Wednesday and the central bank declared it could
no longer afford to intervene to support the currency.
Ukraine, which is seeking a $2.2 billion loan from the IMF,
has also been hit hard by the crisis.
Citing the knock-on effect of the crisis in neighboring
Russia, the IMF said on Tuesday it was reassessing economic
conditions in Ukraine.
Once this reassessment is completed, the IMF was expected
to consider Ukraine's loan, which would support a program of
tough economic reforms and help the former Soviet republic
weather the financial crises gripping Russia and Asia.
Ukraine's hryvnia has taken a battering in the wake of
neighboring Russia's rouble devaluation. What happens in Moscow
is critical for Kiev because Russia accounts for about 40
percent of Ukraine's foreign trade.