Russia Lifts Rates, Giving Up Efforts To Prop Markets
MOSCOW -- Russia's central bank raised interest rates for the second time in less than a month, giving up efforts to shore up its slumping currency and bond markets with direct intervention.</br></br>The move came late in the day as the International Monetary Fund and World Bank seemed set to step in with nearly $2 billion in loans by year end.</br></br>A senior U.S. administration official suggested yesterday that more IMF assistance could be made available if Russia improved its tax collection record. That "would make it possible for the IMF to help them through any problems they might have," Deputy Treasury Secretary Lawrence Summers said.</br></br>The World Bank is going to provide about $800 million in the next several months, he added, as part of its "important support of ongoing structural reform" in Russia. And German Chancellor Helmut Kohl Sunday pledged to help Russia win more financial support.</br></br>Early yesterday, the Russian central bank sharply raised its daily intervention limit for the dollar. The ruble recorded its sharpest one-day drop this year, falling to the central bank's limit of 5,963 rubles per dollar from 5,931 Friday. Government bond prices also plunged. Yields surged to 35% to 45%-the highest levels in a year.