ocks) at Moscow Stock Exchange dropped by 7,5%, and the trades were stopped. Second opening of the Russian Trading System practically didn’t change anything, because in 10 minutes after trades resuming “Gasprom” stocks dropped by additional 8%. One of the witnesses is telling how it was at stock exchange:“From the beginning of trades has passed only an hour, but stock quotes dropped by that time by 10%. Somebody lost one more million of dollars. The market was crashing. It wasn’t decreasing or correction, but crush. I couldn’t follow after the numbers on the brokers’ monitors. “Mosenergy” – minus 5% from the moment of opening, “Lukoil” – minus 6%, “Rostelecom” minus 8%. Again “Mosenergy” – already minus 6.5%. In front of my eyes people were losing millions of dollars”Comparatively abrupt jump was noticed at Russian foreign exchange market as well. On October 28 US dollar raised comparatively to Russian ruble by 54 points. However the Central Bank managed to handle the situation without dollar intervention. But Russian governmental bonds in foreign exchanges suffered essentially. The cause of the catastrophic dropping of the foreign exchange securities is very strong market internationalization. Major parts of the investors in Russian securities were situated abroad, where was pretty hot on those days and without Russian securities. Nobody could support these sectors – in scales of the world’s capital market, Russian market of foreign exchange obligations was hardly recognizable.On Monday, November 10, 1997 the Central Bank of Russia admitted that financial crisis was in the country. For that reason Central Bank announced increasing of the key interest rate from 21% to 28%. It had also been announced that beginning January 1998 1 US dollar at Russian market would be equal to 6200 rubles plus-minus 15%. Practically...
