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Moscow tries to stem market panic | Moscow tries to stem market panic |
(about 5 hours later) | |
Moscow's stock markets are to remain closed until Friday, as the government tries to stem a plunge in share prices and restore confidence in the economy. | Moscow's stock markets are to remain closed until Friday, as the government tries to stem a plunge in share prices and restore confidence in the economy. |
Finance Minister Alexei Kudrin said 60bn roubles (£1.3bn) would be pumped into Russia's three largest banks to help bolster the financial markets. | Finance Minister Alexei Kudrin said 60bn roubles (£1.3bn) would be pumped into Russia's three largest banks to help bolster the financial markets. |
President Dmitry Medvedev said supporting the financial system was the government's "most important priority". | President Dmitry Medvedev said supporting the financial system was the government's "most important priority". |
The crash has brought back memories of Russia's financial crisis of 1998. | The crash has brought back memories of Russia's financial crisis of 1998. |
Then the rouble was devalued, the country defaulted on its debts, and many banks failed. | Then the rouble was devalued, the country defaulted on its debts, and many banks failed. |
While the country's economy as a whole is now in far better shape, there is still great uncertainty over what is around the corner, leading to a collapse in confidence, says the BBC's James Rodgers in Moscow. | While the country's economy as a whole is now in far better shape, there is still great uncertainty over what is around the corner, leading to a collapse in confidence, says the BBC's James Rodgers in Moscow. |
Investors flee | Investors flee |
Financial regulators halted trading on Wednesday after stocks fell to the lowest level in nearly three years. | Financial regulators halted trading on Wednesday after stocks fell to the lowest level in nearly three years. |
Obviously, the crisis on the world financial floors is more profound than the most pessimistic earlier forecasts President Dmitry Medvedev Russia bullish over market crisis | |
Russia was not alone. Markets around the world have dived this week as several big banking names have gone under due to the effects of the credit crunch. | Russia was not alone. Markets around the world have dived this week as several big banking names have gone under due to the effects of the credit crunch. |
But it has shocked a stock market which was hitting record highs as recently as May this year, helped by an economy riding high on record oil and gas prices. | But it has shocked a stock market which was hitting record highs as recently as May this year, helped by an economy riding high on record oil and gas prices. |
While the global turmoil and a slide in the price of Russia's abundant oil are some of the causes, analysts also point to investors fleeing Russia in the aftermath of its war with Georgia. | While the global turmoil and a slide in the price of Russia's abundant oil are some of the causes, analysts also point to investors fleeing Russia in the aftermath of its war with Georgia. |
About £20bn has been pulled out of Russia since early August, Reuters estimates. | About £20bn has been pulled out of Russia since early August, Reuters estimates. |
The executive board of Micex, one of Russia's two main exchanges, called the situation "extraordinary". | The executive board of Micex, one of Russia's two main exchanges, called the situation "extraordinary". |
In a bid to support the banking sector, the finance ministry has pledged billions of dollars of loans. | In a bid to support the banking sector, the finance ministry has pledged billions of dollars of loans. |
Facing a liquidity squeeze, central bank officials on Thursday cut the reserves banks were allowed to hold, forcing them to release billions of roubles. | Facing a liquidity squeeze, central bank officials on Thursday cut the reserves banks were allowed to hold, forcing them to release billions of roubles. |
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