RUSSIA replaced Asia as the primary focus of investor concerns this week, with yields on Russian Treasury bills soaring to over 80% and share prices tumbling by 11% on Wednesday. The shake-out was prompted by fears that a devaluation of the rouble could derail the entire economic reform process in Russia. Standard & Poor's added to the country's woes, placing its BB- sovereign rating for Russia on CreditWatch with negative implications. The rating agency said: "The government's high budget deficit -- in the context of domestic political uncertainties and a volatile financial environment for emerging market issuers -- is negatively affecting capital inflows."
May 29, 1998