Russian bank chief quits in wake of rouble disaster

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The Independent Online
ONE OF Russia's most tenacious, controversial and powerful men, Viktor Gerashchenko, resigned yesterday as head of the Central Bank. His departure was long sought by free-market radicals, and finally forced by the gyrations of the rouble.

Mr Gerashchenko, who has likened Russia's chaotic economy to a 'whorehouse' but who told parliament on Thursday he saw no reason to step down, handed in his resignation to President Boris Yeltsin after a meeting in the Kremlin, a spokesman said.

He is by far the most significant casualty of a crisis triggered on Tuesday by a drop of around 21 per cent in the rouble's value against the US dollar. The currency, since fortified by heavy Central Bank intervention, has bounced back to near its level at the start of the week. But the political fallout continues.

Mr Yeltsin, who called the rouble's plunge a 'threat to national security', had asked the State Duma, the lower house of parliament, to unseat the veteran Central Bank chief. Mr Yeltsin last night issued a decree formally endorsing Mr Gerashchenko's exit .

The acting finance minister, Sergei Dubinin, was sacked on Wednesday and his replacement, Andrei Vavilov, has been declared a lame- duck after only a day in the job. Itar-Tass news agency yesterday quoted the head of the Russian civil service as saying Mr Vavilov would serve 'only for some time until a replacement is found'.

There has been speculation that the crucial post of finance minister may be offered to its former occupant, Boris Fyodorov, a noisy enemy of Mr Gerashchenko and a truculent free-marketeer. He has also been named as a possible replacement as head of the Central Bank. Returning to Moscow from London yesterday, he said he had so far been offered nothing.

Reviled by liberals, whose American guru, Jeffrey Sachs, coined the insult the 'world's worst central banker', Mr Gerashchenko survived more than a year after the demolition of his former power base in the previous parliament, the Supreme Soviet. He responded to frequent calls for his resignation by demanding the scalps of foes responsible, he said, for turning Russia into a brothel.

Despite his ties with the Soviet-era parliament, shelled into submission last year, Mr Gerashchenko confounded critics by supporting greater competition in banking and speaking out against a Kremlin decree to protect Russian banks from foreign rivals.