Yeltsin blames rouble's collapse on sabotage

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The Independent Online
IN A throwback to Soviet habits, President Boris Yeltsin yesterday blamed sabotage and secret machinations for the 'disastrous fall' of the rouble. He sacked Russia's acting finance minister and ordered an investigation headed by the former KGB security service.

Mr Yeltsin also asked the Duma, the lower house of Russia's 10-month-old parliament, to sack the head of the Central Bank, Viktor Gerashchenko. It is the third time in just over a year the Kremlin has tried to unseat the powerful Central Bank chief, described by the American economist Jeffrey Sachs as the 'world's worst central banker' but better known in Russia as a tenacious survivor.

The rouble recovered by 5 per cent against the dollar but this did nothing to calm a crisis that is as much political as economic. A no-confidence vote has been scheduled in the Duma for 21 October. 'The removal of two people will not satisfy us,' thundered Vladimir Zhirinovsky. 'We'll be happy to let them go but better would be a carriage-full.' Sergei Glazyev, head of the legislature's economic committee said: 'This shows that that all this talk about economic stabilisation is just hot air.'

President Yeltsin, searching for a scapegoat for Tuesday's embarrassing spectacle of a currency in free-fall and a government in disarray, met his Security Council, an unelected inner Kremlin cabinet. He named its head, Oleg Lobov, and Sergei Stepashin, chief of the Federal Counterintelligence Service, to lead an inquest into why the rouble plummeted on Tuesday.

The currency's plight, Mr Yeltsin was quoted as saying, was 'sabotage or the manifestation of a policy of extreme irresponsiblity and slovenliness by the special groups of people who organised the rouble's disastrous fall'.

But economists were unconvinced. 'Yeltsin wants to identify an enemy. This is all very standard for us,' said Pavel Teplukhin of the Centre for Economic Performance. 'They always have to find someone. Perhaps not the CIA anymore but maybe Mavrodi,' he added, referring to the jailed head of the collapsed pyramid scheme MMM. Prices at kiosks, from which many Russians buy imported food and drink, are rising. 'From a political point of view, the situation is serious,' Mr Teplukhin said. 'From the standpoint of the market, though, it is not that bad.'

Currency trading has gone from Soviet taboo to national obsession, with exchange offices far outnumbering bakeries. But despite this and the opening of a central exchange, housed in the ground floor of a Stalin-era skyscraper, Russia remains captive to habits that led the Soviet premier, Valentin Pavlov, to announce in 1991 that the CIA was plotting to flood Russia with counterfeit currency.

The main casualty has been Sergei Dubinin, fired before being even confirmed finance minister. He blamed the rouble's woes on a retreat, backed by the Prime Minister, Viktor Chernomyrdin, from a tight credit policy: 'Now we have to decide what we want - either the stabilisation of finances or further subsidies to bankrupt enterprises.'

(Photograph omitted)

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