Yeltsin helps to calm market

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The Independent Online
PRESIDENT BORIS Yeltsin declared yesterday that the Russian rouble was safe, helping the population to relax again after Thursday's panic over a possible devaluation.

"It won't happen - I say that firmly and clearly," the Kremlin leader answered reporters, who caught him on holiday and told him his comment was worth more than all the assurances already heard from government ministers.

"It's not just a matter of what I think, of my own fantasies, of what I do or do not want to see. It's all calculated," he said.

Mr Yeltsin, who was visiting the historic northern town of Novgorod, added that he had no plans to interrupt his holiday as he did at the end of July, because that would be interpreted by the people as meaning that the situation was worrying.

"On the contrary," he said, "the President should take it easy."

Mr Yeltsin's words should further help to calm markets that were already returning to normal after the fever of "Black Thursday". The rouble was only slightly down yesterday at 6.200 to the dollar, demand for foreign currency was being met and the Stock Exchange was operating again.

Investor confidence had been shaken by a suggestion from the billionaire fund manager, George Soros, that the rouble still needed to be devalued by 15-25 per cent despite credits from the International Monetary Fund (IMF) intended to avoid that.

For all his philanthropic work, the Hungarian-born Mr Soros is likely to be unpopular in Russia now after news that his fund made a profit of more than 100 million dollars by currency trading while the panic lasted.

In one ironic way, the crisis seems to have helped Prime Minister Sergei Kiriyenko, who is still pushing for acceptance of revenue-raising measures that were a condition of the IMF's support.

Deputies from the State Duma or parliament had been reluctant to break their vacation to consider the new laws but since the panic they have agreed to convene in an extraordinary session.

After a summer of strikes by unpaid miners and doctors, raising the spectre of mass social unrest if the economic crisis continues, the debate is likely to be stormy. But it would appear that President Yeltsin has prepared a scapegoat to throw to the angry Communist and nationalist opposition.

Yesterday, while he toured a meat factory in Novgorod, the Kremlin leader complained about the work of the Economics minister, Yakov Urinson, and summoned him to the presidential holiday cottage by Lake Valdai. All the signs are that there will be a sacking this weekend.

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