Publication: Monitor Volume: 4 Issue: 163

Sergei Dubinin yesterday resigned as chairman of Russia’s Central Bank. (RTR, September 7) Dubinin–a strong monetarist, doggedly opposed to printing money to cover the fiscal deficit–has been blamed for exacerbating the financial crisis by refusing to devalue the ruble long after devaluation had become inevitable. He is accused of allowing the erosion of the population’s savings by resisting devaluation in a fruitless attempt to shore up Russia’s inefficient and overextended banks. Dubinin defended his record yesterday, saying that during his nearly three years as chairman of the Central Bank, the stability of the ruble was assured. “Under my leadership, the Central Bank did not print empty money,” he said. Instead, he blamed the government for failing to collect taxes and the Duma for dragging its feet over a new tax code. “Monetary policy methods cannot be used indefinitely to compensate for weaknesses in tax collection and in managing the state debt, both foreign and domestic,” Dubinin said. (RTR, September 7)

President Yeltsin must now nominate a new bank chief to the Duma, which has the power to approve or reject the nomination. Officially, the ruble fell yesterday to 18.90 to the dollar. (Financial Times, September 8) When the crisis erupted less than a month ago, the ruble was trading at just over 6 to the dollar. It has therefore lost two-thirds of its value in three weeks. On the streets, however, the ruble was trading at up to 30 to the dollar yesterday. Some financiers are predicting that it will fall to 40 or 50 in the weeks ahead. (BBC, September 7) The European Commission, governing body of the European Union, said yesterday that it was examining Russian proposals for introducing a currency board–pet project of acting Prime Minister Boris Fedorov–including the possibility that the ruble should be pegged to the euro. Britain, which presently chairs the G-7 group of leading industrialized nations, has called a meeting of the G-7 in London next Saturday to discuss the idea. (Financial Times, September 8)