Moscow, Aug 17: Russia's government and central bank on Monday radically widened the corridor within which the beleaguered Russian ruble fluctuates, raising the upper limit by some 50 per cent to 9.5 against the dollar. The government and central bank also announced a moratorium on foreign debt repayments, suspended all further auctions of domestic debt instruments and said the debt would be restructured into new bonds.The lower limit was fixed at six to the greenback, and the government and central bank will defend the newly widened rate corridor until the end of the year, Russian agencies reported, citing a government statement.
The new exchange rate policy, which comes after weeks of speculation that the broke government would be forced into a sharp devaluation of the ruble, compares with Friday's central bank fixing of 6.29 to the dollar, within a corridor of 6.27-6.31.
The dramatic monetary measures came after months of financial chaos in Russia, where investors have staged a mass exodus fearing adebt default and devaluation. The stampede has bled Russian markets white, heaped pressure on the ruble and driven the government to the brink of bankruptcy.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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