Publication: Monitor Volume: 1 Issue: 145

President Boris Yeltsin yesterday said Russia will maintain limits on the ruble exchange rate through mid-1996 in an effort to stem inflation and spur investments. The corridor within which the ruble can trade against the dollar was lowered to between 4,550 and 5,150 rubles per dollar from 4,300 to 4,900, until the end of June. The government also announced a package of measures to help companies and boost exports. They include scrapping some export tariffs and reducing export duties on oil and gas. Yesterday’s decisions will lower the benchmark refinancing rate to 160 percent from 170 percent, the second interest rate cut in just under a month. (9)

The moves appear designed to prolong the appearance of relative economic stability until after presidential elections next June. They also should help to win over exporters and industrialists to government policies in the run-up to this month’s parliamentary elections. A lower ruble means that exporters find it easier to sell their goods abroad, while lower interest rates should boost investment in cash-starved industrial firms. The new corridor range for the ruble will do little to adjust fully for inflation, but it sends an encouraging signal to exporters. Since most dealers had expected the government to lower the ruble range, the news had little impact on the currency market.

Youth Rally.