| Date |
Event/Document |
Document Content |
| 23 March |
Yeltsin fires Prime Minister Viktor Chernomyrdin
and the entire Cabinet, saying reforms were not dynamic enough. He names virtually unknown
Energy Minister Sergei Kiriyenko as acting prime minister. Markets already uneasy over
turmoil in Asia and a slump in world oil prices are shocked, and many investors retreat to
the sidelines amid the political uncertainty. |
| 27 March |
Yeltsin formally nominates Kiriyenko as premier,
vowing to dissolve parliament if it fails to approve him, which it finally does one month
later. |
| 29 April |
New Cabinet, packed with reformers, is announced.
Markets mainly rise over this period, but major investors still sidelined. |
| 12 May |
Coal miners protest unpaid wages, blocking a
major railway. Stocks tumble, due mainly to a law restricting foreign ownership of shares
in electricity giant UES. |
| 13 May |
Russian markets fall further on news of Asian
woes, amid violence in Indonesia and the poor state of Japan's economy. |
| 26 May |
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 company still in state hands. Finance minister announces
spending cuts of $10 billion. |
| 27 May |
Central Bank triples key interest rate to 150
percent after GKO yields soar and shares tumble. |
| 29 May |
Influential Russian tycoons pledge to back
Yeltsin. Yeltsin appoints Boris Fyodorov to head tax service. |
| 4 June |
Central Bank cuts key interest rate to 60 percent
from 150 percent in a sign of growing confidence. |
| 18 June |
The International Monetary Fund delays an
expected $670 million instalment of its $9.2 billion loan to Russia, citing problems with
implementing fiscal reforms. |
| 19 June |
Russia asks for additional $10 billion to $15
billion credit package from the IMF and other lenders. |
| 23 June |
Yeltsin and Kiriyenko present anti-crisis plan
consisting mainly of 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. |
| 25 June |
The IMF approves the release of the $670 million
instalment, but it fails to impress traders and shares fall again. |
| 1 July |
Siberian miners renew picketing of railways,
demanding wage arrears and the resignation of Yeltsin and his government. Stocks tumble on
overall uncertainty. |
| 13 July |
International lenders pledge $22.6 billion in
extra credits spread over 1998 and 1999. Stocks briefly soar. |
| 15 July |
The State Duma fails to adopt most of government
anti-crisis plan, approving measures that Kiriyenko says will provide only one-third of
targeted revenues. He vows to compensate through government resolutions and presidential
decrees, a legally questionable approach. |
| 19 July |
Yeltsin vetoes reduction in tax cuts and decrees
a fourfold hike in land taxes after Duma rejects most of the revenue-raising elements in
the anti-crisis package. |
| 20 July |
IMF approves its $11.2 billion share of the new
international loans. First $4.8 billion made available. |
| 29 July |
Yeltsin cuts short his vacation and flies to
Moscow citing "urgent business," prompting fears of a Cabinet reshuffle,
although he replaces only Federal Security Service Chief. |
| 4 August |
Yeltsin resumes vacation in Valdai lake
region. |
| 6 August |
World Bank approves $1.5 billion structural
adjustment loan for Russia, including an immediate advance of $300 million. |
| 10 August |
Miners lift rail blockade after a temporary deal
with the government. But stocks fall and GKO yields rise as investors take money out of
Russian markets amid fears of devaluation and doubts over state finances. |
| 12 August |
Central bank says interbank market virtually
paralysed by liquidity problems and lack of confidence; imposes limits on purchases of
foreign exchange by banks and says it will act to prevent crisis from spreading. |
| 13 August |
George Soros advises the Russian government to
devalue rouble and introduce a currency board, pegging rouble to dollar or Euro. Central
bank official says devaluation would not help solve crisis. Stocks plunge to lowest levels
in more than two years and short-term GKO yields soar as banks dump paper for roubles.
Central bank expands banks' access to overnight credits. Kiriyenko says there is no
economic basis for the market decline and his government is in position to meet
obligations. |
| 14 August |
Stocks rebound and debt market stabilises.
Yeltsin, on visit to Novgorod, rules out devaluation and backs 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 communist bloc backs Yeltsin's call for an
extraordinary summer session of parliament, saying it should focus on the current crisis.
Some major banks have trouble meeting payments to each other. Dollars become
scarce on the street. |
| 17 August |
Statement of the Government and the Central Bank |
Government plans:
- non-residents are not allowed to invest in short term (i.e. less than 1 year) rouble
assets;
- conversion of GKOs/OFZs into new governmental securities; and
- 90 day moratorium on certain hard currency transactions.
|
| 17 August |
Decision of the Board of Directors of the Central
Bank |
Imposes a 90 day moratorium on various hard currency
transactions connected with the movement of capital. |
| 17 August |
Resolution of the
Government No. 980 "On the Organisation of Work for the Payment of Certain Types of
State Securities" |
The Ministry of Finance is authorised to prepare
draft legislation on the procedure for repayment of GKOs/OFZs maturing prior to 31
December 1998. GKOs/OFZs issued into circulation prior to 17 August 1998 to be repaid with
new fixed-coupon federal loan bonds. |
| Kiriyenko insists the moves do not amount to a
default on the debt or a devaluation of the rouble, but the exchange rate on the street
collapses and Russians line up in a frantic search for dollars. |
| 19 August |
Central Bank telegram No. 177-T |
Generally restates the Decision of the Central Bank of 17
August 1998. |
| 19 August |
Central Bank Directive No. 320-U of 19 August
1998 "On currency operations of residents" |
Generally restates the Decision of the Central Bank of 17
August 1998 and provides that it is effective from the date of such Decision. |
| 21 August |
Statement of the Central Bank |
The Central Bank "intends" to provide
state guarantees to private deposits in all Russian banks that have entered into an
appropriate agreement with Sberbank. |
| 21 August |
Central Bank Directive No. 323-U |
The Central Bank limits the spread between the sale and
purchase price of cash currency to 15 percent. |
| 23 August |
Presidential Decree No. 983 "On the
Government of the Russian Federation" |
Kiriyenyo's Government is dismissed and Chernomyrdin is named
acting prime minister. |
| 25 August |
Presidential Decree No. 987 "On Performance
of Duties by the Members of the Government of the Russian Federation" |
President instructs members of the Government (except
Kiriyenko) to continue to serve until a new government is formed. |
| 25 August |
Presidential Decree No. 988 "On Certain
Measures for Stabilising the Financial System of the Russian Federation" |
The President instructs Chernomyrdin to prepare a procedure
for redemption of GKOs/OFZs maturing prior to 31 December 1999. |
| 25 August |
Resolution of the Government No. 1007 "On
Redemption of State Short-Term Zero-Coupon Bonds and Federal Loan Bonds with Fixed and
Floating Coupon with Maturity up to 31 December 1999 and Issued into Circulation before 17
August 1998" |
Provides procedure for redemption of GKOs/OFZs issued prior
to 17 August 1998 and maturing prior to 31 December 1999 and subsequent reinvestment of
funds received upon redemption. Unlike Resolution of the Government No. 980 of 17 August
1998, the holders of GKOs/OFZs will be paid in roubles and not in "new
securities". |
| 26 August |
Central Bank Directive No. 328-U of 26 August
1998 "On the introduction of temporary limitations on the execution by residents of
operations connected with the movement of capital" |
A more extensive version of Central Bank Directive No. 320-U
of 19 August 1998 providing that it is effective from 17 August 1998. It deals with
closing loopholes in payments to non-residents under loans in excess of 180 days. |
| 26 August |
The Central Bank revokes the licence of Bank
Imperial. |
| 28 August |
The Central Bank appoints a temporary
administrator for SBS-AGRO Bank. |
| 28 August |
Central Bank Regulations No. 52-P "On the
Procedure for the Issue of the Bonds of the Central Bank of the Russian Federation"
and No. 53-P "On the Circulation of the Issues of Bonds of the Central Bank" |
|
| 31 August |
Chernomyrdin rejected by Duma as prime minister,
253 to 98. |
| 31 August |
Informational Notice from Central Bank and
Ministry of Finance |
The Central Bank and the Ministry of Finance distributed an
"Informational notice on the refinancing programme for state short-term zero-coupon
bonds and federal loan bonds with fixed and floating coupons with maturity up to 31
December 1999 and issued into circulation prior to 17 August 1998" and a
"Clarification on the Procedure for the Redemption of State Short-term Zero-coupon
Bonds and Federal Loan Bonds with Fixed and Floating Coupon Yields with Maturity up to 31
December 1999 and Issued into Circulation Prior to 17 August 1998". |
| 1 September |
Central Bank Regulation No. 55-P of 1 September
1998 "On the Procedure for Effecting Payments in Foreign Currency under Export and
Import Operations Performed by Residents of the Russian Federation" |
General rule: (i) for imports money should be paid only after
goods have been delivered/services performed in Russia and (ii) in the case of exports,
money should be paid before goods leave Russia. |
| 1 September |
Tokobank license revoked by Central Bank. The
Central Bank discloses details of its plan to provide state guarantee for private
depositors of various commercial banks. Metro tokens increase from 2 to 3 roubles. |
| 2 September |
The Federal Securities Market Commission
challenges the validity of the Central Bank bonds to be issued under Central Bank
Regulation No. 52-P and 53-P of 28 August 1998. |
| 2 September |
The Central Bank details further its plan to
guarantee private depositors. |
| 3 September |
The Moscow City Arbitration Court accepts the
application for bankruptcy of Tokobank. |
| 4 September |
Inkombank, the third largest bank in Russia, is
placed under temporary Central Bank administration. |
| 4 September |
Central Bank Directive No. 344-U "On
Suspending Payments by Residents to Non-Residents on Forward Currency Contracts" |
Prohibits payments under forward currency contracts during
the moratorium. |
| 7 September |
Rouble exchange rate rumoured from 20 to 40:$1.
Sergei Dubinin resigns as head of Central Bank. Chernomyrdin rejected by the Duma for the
second time, 273 to 138. Moscow District Court suspends temporary
administration of Inkombank. Long lines appear at gas stations in anticipation of price
increases. |
| 8 September |
Gasoline prices rise from 2.6 to 3.7 roubles per
litre, much less than anticipated. A Moscow court voids the Central Bank’s takeover
of Inkombank. The rouble "stabilises" at about 20:$1, down from 6.2 23 days
earlier. |
| 9 September |
Joint Ministry of Finance and Central Bank
Clarification on the "Procedure for the Redemption of State Short-term Zero-coupon
Bonds and Federal Loan Bonds with Fixed and Floating Coupon with Maturity up to 31
December 1999 and Issued into Circulation Prior to 17 August 1998". |
The clarification extends until 18 September 1998 (inclusive)
the date for holders of GKOs/OFZs maturing from 17 August 1998 to 3 September 1998 to
apply to acquire new state bonds. |
| 9 September |
Rouble jumps to 14:$1. Yeltsin talks to or about
Lebed, Stroyev, Primakov and Maslyukov. The Association of Russian Banks files with the
Supreme Court of the Russian Federation a claim to invalidate various recently adopted
legal acts. |
| 10 September |
Rouble falls to 9:$1 as exporters are required to
sell half their earnings and Gazprom dumps dollars on the market. Chernomyrdin withdraws
and Yeltsin nominates Yevgeny Primakov as Prime Minister. Inkombank agrees to let the
Government have 50% + 1 share, but not 75% + 1. |
| 11 September |
No roubles available on the street. Primakov
approved 317 to 63. He names Yuri Maslyukov as First Deputy Prime Minister for Economic
Policy (Communist Duma member and former head of Gosplan) and Igor Ivanov to replace
himself as Foreign Minister. At Yeltsin’s request, the Duma names Victor Geraschenko,
who held the job during 1992-94 when hyper-inflation raged and was called by Jeffrey Sachs
"the world’s worst Central Banker", to again head the Central Bank. Rosbank
formed by Uneximbank, Most Bank, and Bank Menatep. Renaissance cancels merger with MFK.
MFK expected to join Rosbank. |
| 15 September |
Rouble remains artificially low. The Moscow Times
speculates it is because forward currency contracts can be settled more advantageously.
The Central Bank suspends the temporary administration of Inkombank until the 4 September
Order of a Moscow Court is overturned. |
| 16 September |
Alexander Shokhin, regarded as a centrist and
supporter of production sharing, is appointed Deputy Prime Minister for Finance. The
rouble falls 22% from 9.61: $1 to 12.45: $1. |
| 17 September |
Two more relative moderates, Vladimir
Ryzhkov (Our Home is Russia Duma Speaker) and Vladimir Bulgak (Dep PM for Science and
Technology under Chernomyrdin) join the Cabinet, as Deputy Prime Ministers for social
policy and industry and communications, respectively. The rouble continues its collapse.
Shokhin states that there will be a week’s delay in debt restructuring. News reports
indicate 160,000 professionals lost their jobs in Moscow since 17 August. |
| 18 September |
Regulation 55-P is repealed by
Directive No. 352-u. The rouble hits 14.6: $1 following the Central Bank’s statement
that it will print new money to increase liquidity in Russia’s failing banks. Late
Friday and into Saturday the Central Bank buys GKOs from major Russian banks, which are
supposed to use these proceeds to pay their debts. Banks which cannot repay their debts
are theoretically to be closed. An estimated 3.2 billion in roubles $256 million] added to
money supply. Foreign holders of $11 billion in GKOs (now worth $5 billion at current
exchange rate) not allowed to participate. Vladimir Ryzhkov refuses the thankless post of
Deputy Prime Minister for Social Issues, claiming inexperience (age 32). Vadim Gustov,
Governor of Leningrad Oblast accepted a position as First Deputy Prime Minister for
Regional Affairs. |
| 21 September |
Central Bank does not permit currency
exchange to open. Official rate remains at 16.38. Gennady Kulik, Agrarian Party (ally of
communists) named Deputy Prime Minister for Agriculture. |
| 22 September |
Valentina Matviyenko, Ambassador to
Greece, nominated to be Deputy Prime Minister for Social Affairs. Finance and State Tax
Service still open. |
| 23 September |
MGTS (Moscow City Telephone) pays
$9mm in interest due on Eurobonds issued March ’98. |
| 24 September |
PM Primakov states that the 17 August
announcements were not authorised by the President, not well thought out and resulted in
chaos. Shokhin claims that Russia "joined" the Paris Club on unprofitable terms
and demands negotiations on offsets. The Paris Club refuses to renegotiate Russia’s
debt while talks between IMF and Russia continue. Shokhin wants IMF funds agreed to in
July and negotiations on changing the agreement since both the IMF and Russia are equally
responsible for the present situation. Geraschenko warns that "excessively greedy and
stubborn foreign banks" may get nothing. "I do not want to scare the West with
statements about a default on Russia’s foreign debts, but Western financial
organisations should be loyal." Western institutions want to wait until year end to
see how things develop, giving Russia few options. Sale of Rosneft cancelled again.
Alexander Livshits reportedly nominated as Finance Minster, with Sergei Generalov
reappointed Fuel and Energy Minister, along with Sergei Frank at Transport. Law on
Bankruptcy of Financial Institutions passed second and third readings in Duma. |
| 25 September |
Final Cabinet appointments: Nikolai Aksenenko,
Minister for Railways; Pavel Krashennikov, Minister of Justice; Boris Pastukhov,
Minister for CIS Cooperation; Ramazan Abdulatipov, Minister for Nationalities; Dmitri
Gabunia, Minister of Trade and Industry; Andrei Shapovaliants, Minister of Economy;
Mikhael Kirpichnikov, Minister for Science & Technology. Mikhail Zadornov reappointed
as Minister of Finance. Official ruble rate will be 15.6099. Sergei Dubinin becomes Deputy
Chairman of Gazprom Bank. Shokhin resigns after ten days, citing objections to
reappointment of Zadornov as Minister of Finance. Others say he resigned because IMF has
refused September tranche of July rescue package. |
| 25 September |
Lehman attaches $117 million in London accounts
of Unexim and Inkombank. Inkombank owes Lehman $87 million in forward contracts. Deadline
for GKO choices again postponed. Central Bank states another 10.6 billion roubles ($668mm)
was exchanged with commercial banks. Debts to regional tax agencies were paid by banks
withdrawing rubles from their reserves, not by the CB purchasing GKO’s. 1.96 billion
roubles taken from reserves. September 18 took 3.3 billion roubles. Dmitry Vasiliev
announces he will resign if the Government follows the policies of Geraschenko and
Zadornov. |
| 28 September |
Boris Fyodorov fired by PM as head of State Tax
Service; Viktor Khristenko, Deputy PM fired as well. Farit Gazizullin, reappointed as
State Property Minister Yeltsin states he has not accepted Vasiliev’s resignation as
head of Federal Commission on the securities markets. Rouble rate set at 15.88 |
| 29 September |
Rouble rate set at 15.99. Lehman attaches SBS
Agro accounts in London in a dispute over a "repo" transaction. Georgy Boos,
Duma Deputy, named head of tax service. Press revealed Dubinin’s salary of $240,000
per year or 1,258,113,518 rubles, the same as the salaries of 210 Duma deputies. |
| 30 September |
Uneximbank has frozen the accounts of Lehman in
Moscow at Uneximbank and other Moscow banks. Luzhkov in Blackpool for Tony Blair’s
Labor Party conference says he is considering running for President if there are no
qualified candidates. He supports a "left-center" mix of a market economy with
social concerns.
|
