Jeff Feldman
Starting in August, and continuing on through the winter of 1998 and beyond, Russia underwent a severe curreny devaluation. Official exchange rates fell from 6 Rubles to the dollar to more than 20. This crisis befell Russia soon after the asian economic crisis swept through other countries in the area. First the Asian economic crisis caused a drop in Russian exports. Then came a drop in Gas and Oil prices, which compose Russia's main source of hard currency.
Stories may make reference to meetings of the G-7 or the G-8. The G-7 (Group of Seven major industrialized democracies) includes Canada, France, Britain, Germany, Italy, Japan and the U.S. In addition to the members of the G-7, the G-8 also includes Russia.
Timeline
8/20/1998- In an effort to avoid full default on it's loans, russia suspended payment on its debt. It hopes this will allow it to give out some of the unpaid wages the state has accumulated. Russia hopes the Ruble may stabilize soon. It is trading at 6.99 rubles to the dollar.
8/25/1998- The ruble drops 9.2 percent against the dollar
8/26/1998- The ruble drops another 5 percent, causing the central bank to halt trading.
8/27/1998- Russia's central bank halts dollar sales for the second day in a row. The ruble is trading at an official rate of 7.86 rubles to the dollar, but at a street rate of over 10 rubles to the dollar. The central banks hard currency reserves are at a paltry 13.4 billion dollars, down 1.7 billion since August 14.
8/30/1998- Russia's interim government and parliamentary leaders signed an what amounts to an agreement not to fight with eachother while they attempt to solve the problems with Russia's economy.
9/15/1998- Yeltsin and his new Prime minister Yevgeny Primakov meet at the Kremlin to discuss how to pull Russian out of its economic crisis.
12/03/1998- Ruble falls 18.8 to the dollar
12/18/1998- Yeltsin meets with Ukrainian leader Leonid Kuchma in an attempt to prevent the Ukraine from being dragged down by Russia's economic difficulties.
12/04/1998- The ruble tumbled again, trading at 20 to the dollar and threatening to hit its lowest point since the country's economic crisis struck in August. This slide does not bode well for the Government of Russia, as Yeltsin is currently hospitalized and Prime minister Primakov is struggling to implement some sort of recovery.
12/16/1998- Russian parliament approves the printing of 1.2 billion dollars worth of rubles to pay state bills. However, this will undoubtedly provoke further inflation.
12/31/1998- Russia reports an annual inflation rate of 84 percent. This is up from 11 percent the year before. Russia expected single digit inflation in 1998 before the crisis struck. The Russian economy contracted 5 percent in 1998, one of the worst depressions ever to be experienced by an industrialized hation