Russian Markets Rally

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MOSCOW: Russian markets today staged a mild recovery following yesterday's interest rates spike, but without substantial foreign assistance the danger of meltdown continues to loom large. "Russia is rapidly depleting its reserves to prop up the ruble," says TIME Moscow correspondent Andrew Meier. "Unless they get a huge standby facility from the IMF, they'll be forced to cut into their budget in areas such as energy subsidies -- and that raises the danger of a social explosion."

The IMF is trying to play down the situation, insisting there's no crisis. IMF representatives arrive in Moscow today for talks on the routine release of the next $670 million installment of a three-year $10 billion loan. But, says Meier, "Russia could burn up that amount in a couple of days to prop up the ruble -- government officials are still insisting that they need a substantial IMF bailout package." Of course, disaster could also be averted by a flood of foreign investment back into Russia's equity market -- and right now that's a prospect that'll get the same odds as a Yeltsin 2004 presidential bid.