GREGORY FEIFER: Earlier this year, Russia was billing it's record level stock market as an island of stability amid growing financial uncertainty around the world, but no longer. On Monday, Russian stock markets saw their biggest ever one-day drop. The benchmark RTS index plunged more than 19 percent. Today, it fell another seven percent before regulators suspended trading, something they've done repeatedly in recent weeks. Last month, the government pledged more than $170 billion to support the ailing Russian banking system. Yesterday, President Dmitry Medvedev have promised another $36 billion in financial aid.
DMITRY MEDVEDEV: (Russian spoken)
FEIFER: Medvedev said Russia and other countries have to act as quickly as possible to stem the crisis. His announcement prompted markets to rally slightly before dropping again. Analysts say much of the initial fall was due to Russia's invasion of Georgia in August, and government attacks against private companies, which scared off foreign investors. But the latest losses were prompted by the global financial turmoil and the drop in the price of oil, Russia's biggest export. But while markets may be free-falling, the government still holds massive cash reserves generated by the country's energy industry. And Moscow yesterday promised a loan of more than $5 billion to Iceland, whose prime minister said that country faces the prospect of bankruptcy. Gregory Feifer, NPR News, Moscow. Transcript provided by NPR, Copyright NPR.
