World markets have been thrown into turmoil after international multi-billionaire financier, Mr George Soros, publicly called for a devaluation of the Russian rouble and swift Western help for Russia to stabilise its currency.
Mr Soros who almost singlehandedly drove sterling from the European Exchange Rate Mechanism stated that the "best solution" to the present banking liquidity crisis would be to introduce a currency board after a "modest" rouble devaluation of 15 to 25 per cent.
The White House has added to the pressure by urging Russia to take quick action on economic reform plans and warning it that the world has a "big stake" in preventing its financial collapse.
Mr Soros's call for a devaluation was flatly rejected by the Russian central bank. Bank deputy chairman, Mr Denis Kiselyov, said that devaluing the vulnerable Russian currency by the 1525 per cent suggested by the Hungarianborn investor would merely give a green light to speculators to prey further on the Russian currency.
President Boris Yeltsin, on vacation outside Moscow, called Prime Minister Sergei Kiriyenko to offer support and underline that the government's austerity and stabilisation efforts were vital. Mr Kiriyenko, installed by Yeltsin in March to take reforms in hand, had to rail against the trend for a second day running.
Concerns that Russia's postcommunist economy could implode as confidence evaporates was likely to provoke new calls for wealthy nations to stand by the Kremlin reformers.
A White House spokesman said last night that senior officials of the Group of Seven leading industrial countries discussed the crises in Asia and Russia in a telephone conference.
Russian shares lost 6.5 per cent after initial drops of 15 per cent, although trade was minimal. The sums changing hands in Moscow's nascent markets were tiny by global standards but the diminishing faith their slide demonstrated in the Kremlin's reform programme has implications for Western economies and for policymakers worldwide.
Moody's Investors Service cut the credit ratings of several Russian banks, and Standard and Poor's downgraded Russia's foreign currency senior unsecured credit ratings to B minus from B plus.
"This is Black Thursday for the Russian financial markets," ORT, the state-owned television announced in opening its bulletin.
Earlier, Standard and Poor's Corp downgraded Russia's foreign currency senior unsecured credit ratings to B minus from B plus and said the outlook on the longterm rating was negative.
The Irish market followed international downward trends and fell to its lowest in six months with the ISEQ financial index down 2.27 per cent. This compared with a 1.1 per cent fall in London, a 0.9 per cent fall in Frankfurt, a fractional gain in Paris and a 0.5 per cent fall in New York by the time the Irish market closed. Later, the Dow closed down 93.46 to 8459.5.