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Russia: Ruble Falls After Bank Says It Will Print Money

  • Floriana Fossato



Moscow, 18 September 1998 (RFE/RL) - The Russian ruble returned to near record low levels today following an announcment by Central Bank First Deputy Chairman Andrei Kozlov that more of the currency will be printed. Kozlov also announced steps to "inject liquidity into the system" by lowering minimum reserve requirements and allowing commercial banks to release more rubles into the economy. International analysts have warned that such steps could fuel hyperinflation. The ruble was trading on foreign exchange markets today at roughly 19 to the dollar.

Kozlov said in Moscow yesterday that a bank bailout is the only way to enable the paralyzed system to work again. He didn't specify when new rubles will be printed.

Kozlov said that the Central Bank will buy back GKOs, domestic treasury bills, from ailing Russian commercial banks starting next week. Moscow last month declared a moratorium on paying back those bonds.

In government news, Vladimir Ryzhkov, a member of the centrist Our Home is Russia party, today turned down the post of deputy prime minister in Prime Minister Yevgeny Primakov's new cabinet.

Primakov named Ryzhkov, deputy speaker of the Duma, earlier this week as deputy prime minister in charge of social affairs. Ryzhkov told reporters today that he lacks the experience to hold such a responsible post.

As Ryzhkov turned down a cabinet post, regional leader Vadim Gustov accepted one. Russian President Boris Yeltsin today appointed Gustov, governor of the Leningrad region, to the post of first deputy prime minister in Primakov's cabinet. Gustov will be responsible for regional and ethnic policies and the construction industy.
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