MOSCOW, Oct 1 (AFP) - President Boris Yeltsin came out in favour
on Thursday of linking the ruble to gold reserves, Russian news
agencies reported.
In talks with the governor of Sverdlovsk (eds: correct) Eduard
Rossel, one of Russia's more influential regional chiefs, Yeltsin
supported restoration of a "golden ruble", a system which dates back
to the Bolshevik 1920s under which the ruble would be tied to gold
reserves.
According to Rossel, Yeltsin also voiced his support for
Draconian controls on circulation of the dollar in Russia, but the
Kremlin quickly denied the suggestion.
Yeltsin "did not support the idea of banning the free
circulation of the dollar on Russian territory," Dmitry Yakushkin
was quoted as saying by Interfax, adding merely that the issue was
one of many discussed by Yeltsin and the chief of his native
region.
Rossel said however that Yeltsin welcomed his proposals for a
ban on the free circulation of the dollar, a stringent currency
exchange control which would threaten the convertibility of the
ruble and return Russia to the Soviet days of managed rates which
scarcely reflect market realities.
Rossel said the move would only allow the sale of dollars to
individuals planning to leave for abroad.
He said Yeltsin even telephoned the Central Bank to insist that
it think through seriously how to implement the dollar ban and
restoring a "golden ruble".
Under an economy crisis package being drawn up by the
centre-left government, measures to support the ruble by controlling
foreign currency flows have already been outlined.
Exporters earning hard currency are to be forced to sell the
lion's share through the Central Bank and currency exchange, while
banks face tight controls on their foreign exchange activities.
But the programme makes no mention of tying the ruble to gold
reserves. Instead the new government wants to tie the ruble to a
basket of foreign currencies, and will debate the measure as it
considers Thursday measures to arrest Russia's steep economic
decline.
Rossel proposed a string of measures to the Kremlin chief during
their talks, including the notion of an "economic amnesty" under
which Russian citizens who he said held 70 billion dollars in the
'shadow economy' should be encouraged to inject the funds back into
the real economy.
He proposed an income tax amnesty so that those who enriched
themselves during the market economy transition period could be
persuaded to repatriate their money legally, paying just a 10
percent tax.
The Sverdlovsk governor also added his voice to growing calls
for billions of rubles to be printed to pay of wage and pension
arrears and refloat industry. There would however be tight controls
on how industry could spend the bailout credits, he said.
Economists reacted with bewilderment at the latest proposals to
save Russia from its unprecedented economic crisis.
"This would be a return to the Soviet era," said Thierry
Malleret, chief economist at Alfa Capital, of the proposed dollar
ban. "This would stir up huge discontent and be total suicide and
create an explosion of the black market.
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