14th August, 1998
Black Thursday in Russia
Today various news reports from Russia say that Yeltsin and his cabinet are having emergency meetings to deal with the country's latest financial crisis.
CNN reported that yesterday, Moody's Investors Service downgraded Russia's ceiling for foreign currency bonds and notes to B2 from B1. Simultaneously, Standard & Poor's cut the Russian Federation's long-term foreign currency sovereign and senior unsecured credit ratings to single-B-minus from single-B-plus and downgraded Russia's short-term foreign currency rating, revising its outlook on Russia's long-term rating to negative.
CNN Financial News Network said that Marshall Goldman, a professor at Harvard University and an expert on the region, said, "[Russia] has been in a bad state in terms of production, but it was a major exporter of oil, gas and metals. The collapse of the Asian markets and commodities has hurt it badly and affected its trade surplus. It had a trading surplus of $20 to $30 billion and industrial production was beginning to pick up, but that's been aborted. "Even the bottom fishers are worried."
CNN said, "Calls for a currency devaluation and dwindling cash reserves
sent the Russian stock market into a meltdown causing a halt in trading
for 35 minutes and prompting the local press to dub the day 'Black Thursday.'
The Russian Trading System electronic exchange plunged 15 percent in the
first 40 minutes of trading before being halted."
Stock Markets Fall Around the World
The BBC reported today that stockmarkets abound the globe fell sharply yesterday due to growing concerns about the impact of the Asian financial crisis. It said that tens of billions of dollars have been wiped off the value of shares as dealers in New York, London and across Europe rushed to sell stocks. After two and a half hours of trading, the Dow Jones Industrial Average at the New York Stock Exchange was down by just under 200 points, or more than 2.5%. The Dow Jones Industrial Average fell to 8376, close to last week's low of 8361 when the index of leading US shares had tumbled 300 points in one day. Analysts said there could be further falls. The New York market has already lost more than 10% in the past month.
EVEN WITH IMF BAILOUT PLAN OF BILLIONS OF DOLLARS RUSSIA MAY FACE FINANCIAL COLLAPSE
Russia's financial troubles deepened today as the value of stocks and government bonds dropped sharply in Russia deepening the nation's financial woes and causing some financial experts to warn that the International Monetary Fund bailout may not be enough to stave off the a Russian financial collapse.
Russia's benchmark stock index fell by more than 9 percent to its lowest level in more than two years Interest rates on some government bonds climbed up 140 percent. Stock trading was suspended for about 45 minutes when losses exceeded allowable levels.
Social and Economic Collapse Threatens in Indonesia
Local economists in Indonesia warned that the country faces social and economic collapse as a result of the growing financial crisis. In a joint statement Thursday, 15 economists said, "If there is no action, the situation will move towards a total destruction of the Indonesian economy, bringing along the collapse of the social and political life of the people and even the existence of Indonesia." These warnings were echoed this week as we received reports from missionaries living in Indonesia who confirm that inflation is likely to hit 100% and the society is breaking apart. However, due to the hardships facing the nation and persecution of religious miniorities in the most populous Muslim nation on earth, the Church in Indonesia is growing.