Finance Minister Mikhail Zadornov said Thursday (October 22) that the government had not written foreign sources of financing into its budget for the fourth quarter of 1998. There was “no point in hiding” the fact, he continued, that the government will have to print money to cover the budget deficit, but added that he and the other members of Prime Minister Yevgeny Primakov’s cabinet will try to “minimize emissions.” Zadornov said that if the International Monetary Fund does decide to release another installment of its multibillion dollar aid package, this will allow the government to minimize the size of the money emission. On Tuesday (October 20), Zadornov said that no more than 20 billion rubles (a little more than US$1 billion) would need to be printed, while other officials said the emission would be 30-35 billion–“considerably less” than the 50 billion referred to by Aleksandr Pochinok, head of the cabinet of ministers’ financial department (see the Monitor, October 21). Zadornov reported that officials from the finance and economics ministries spent all of Wednesday in meetings with IMF officials, who recently arrived in Moscow. Zadornov said the Russian side presented the fourth-quarter budget, as well as an anticrisis plan (Russian agencies, October 22).
According to Central Bank data, rubles in circulation have already increased 15 percent since the beginning of September. Several high-profile former Russian government officials expressed varying degrees of doubt over whether the Primakov government would be able to avoid uncontrolled inflation. Former Prime Minister Sergei Kirienko said Thursday (October 22) that the Primakov government’s monetary policy had thus far not been too damaging. He warned, however, that if the money-printing and spending continues at these levels, “we may face hyperinflation by February 1999.” For his part, former Acting Premier Yegor Gaidar claimed that from September 1 through October 12 Russia’s monetary base grew by 24 billion rubles, 18 billion of which were a “pure emission.” Gaidar predicted that 25 billion rubles a month will continue to be emitted the rest of this year.
THE GOVERNMENT SCRAMBLES FOR ADDITIONAL FUNDING SOURCES, JUST IN CASE.