canceled a scheduled January 28 bond sale. The Central Bank also raised its refinancing rate from 28% to 42%, with the intent of preventing commercial banks from borrowing from the Central Bank to speculate against the ruble. So far at least, the ruble has remained within its trading band, although unconfirmed reports indicate the Central Bank’s foreign-exchange reserves have fallen from $24 billion to $18 billion since November.

But interest rates at these levels choke off private investment and enormously complicate public finance. Servicing public debt already took over 25% of government expenditures last year, when rates were half what they are now. Forty percent interest rates would render the 1998 budget, which goes to its fourth and final vote in the