Well, the latest crisis began about a month ago when the International Monetary Fund supposedly bailed out the Russian economy. On July 20, the IMF slipped Russia a check for $4.8 billion and promised more financial assistance if the country would implement fundamental economic reforms.
Instead Boris Yeltsin went on a prolonged vacation, and the Duma adjourned for the summer after passing only about a third of the reforms the IMF wanted. This puzzling response was then followed by a fall in the price of oil. Oil is Russia's major export.
Then came a run on the Russian ruble. Soon the run became a stampede. Government bonds running at 150 percent soared to 200 percent and still could not attract the capital needed to cover its budget deficits or prop up the ruble's value.
Then the Bank of Russia announced that the government would let the ruble fall and delay repayment of billions of dollars of debt. That signaled to nearly everyone that Russia was in default. The Russian stock market crashed, consumer prices shot up, and Boris Yeltsin came under attack from Communists and ultranationalists alike.
When rumors spread the Boris Yeltsin was stepping down, the U.S. stock market took a plunge. And that's how we got to where we are today.
What is the solution? Well, Russia needs political stability in order to ensure economic stability. And that does not look likely on the horizon. I believe Christians should pray for this beleaguered country and especially for the leadership that must inevitably follow Boris Yeltsin.
I'm Kerby Anderson of Probe Ministries, and that's my opinion.
© 1998 Probe Ministries International