Rouble zooms back up on the roller-coaster

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The Independent Online
AMID wild theories of conspiracy by bankers bent on overthrowing the government and foreigners carving up the country on the cheap, Russia's market roller-coaster yesterday took the rouble on its second vertiginous journey of the week, rising as swiftly as it had plunged two days before.

After losing 21 per cent of its value against the dollar on 'Black Tuesday', the rouble soared by almost 20 per cent to end yesterday's trading on the Moscow Interbank Currency Exchange at 2,994 to the US currency.

But the recovery, achieved through Central Bank intervention, new restrictions on trading and a hike in the discount rate, did nothing to cool political ardour aroused on all sides by Tuesday's collapse. The Central Bank, its reserves sinking perilously low, spent dollars 150m ( pounds 97m) propping up the rouble. More turbulence is expected.

After the dismissal of the acting Finance Minister, Sergei Dubinin, on Wednesday, his job was yesterday given to his deputy, Andrei Vavilov, 33, a free-market liberal, professionally capable but politically feeble.

Still at work, however, was Viktor Gerashchenko, head of the Central Bank, whose dismissal has been demanded by President Boris Yeltsin. His fate now rests with the State Duma, the lower house of parliament. Reformist legislators want Boris Fyodorov, a former finance minister currently on a trip to London, to take over the Central Bank.

Mr Yeltsin, who described the rouble's fall as a 'threat to the national security of our state', yesterday signed a decree establishing 'The State Commission for Investigating the Abrupt Destabilisation of the Financial Markets'. His official but notoriously intemperate spokesman, Vyacheslav Kostikov, alleged a plot by commercial banks linked to the Communist and nationalist opposition.

Opponents of the Kremlin attributed the rouble's woes to foreigners and crooked local capitalists. The Prime Minister, Viktor Chernomyrdin, offered a humdrum explanation, pointing to 'miscalculation on the part of both the Central Bank and the government, that is, a combination of factors'. He promised to keep inflation at 7 to 9 per cent: 'One should not rock the country now.'