EXCHANGE RATE HITS 28 RUBLES TO THE DOLLAR

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EXCHANGE RATE HITS 28 RUBLES TO THE DOLLAR

Izvestia, December 27, 2000, p. 1

Yesterday the exchange rate passed the psychologically important level of 28 rubles to the dollar. All the same there, is no reason for concern: by all indications, there will be no drastic changes in the exchange rate in the near future, and the maximum that it could reach by the middle of January is 28.30 rubles to the dollar.

The pre-New Year flurry of speculation about the ruble rate was triggered by Central Bank chief Viktor Gerashchenko. For the past eighteen months to two years, Gerashchenko’s public statements about the future of the ruble have actually determined its rate to a significant degree.

Comments such as “Gerashchenko said the exchange rate would be 28 rubles to the dollar, so it will be 28 rubles to the dollar” have not been infrequent over the last eighteen months.

In short, over the past few days banks have directed all their efforts toward buying up dollars, as indicated by the lull on the stock market and the shortage of rubles on the inter-bank market. The volume of trade on the currency market, on the other hand, has increased significantly. On Tuesday it totalled 342 million dollars, the highest within the last six months. It is the average exchange rate during a single day of trading which the Central Bank uses to determine the official exchange rate of the ruble.

According to participants in the currency market, the Central Bank had to spend about $200 million to keep the ruble from falling more than 15 kopecks. However, that isn’t really so large a sum. The Central Bank’s gold and hard currency reserves were over $27.5 billion as at December 1.

Another reason why there is no cause for concern is that the speculators themselves don’t expect to manage to “force” the exchange rate much past 28 rubles to the dollar. Dollar futures contracts maturing in mid-January are selling at 28.25 – 28.30 rubles to the dollar.

VALENTINA MATVIENKO VISITS TULA

Trud, December 27, 2000, p. 2

Deputy Prime Minister Valentina Matvienko’s visit to Tula was motivated mainly by recent protests in this city. Chernobyl clean-up veterans, teachers, and small business owners have been picketing.

Some observers have noted that Matvienko’s visit to Tula coincided with the start of the regional election campaign there.

UNITY VERSUS STROEV

Moskovsky Komsomolets, December 27, 2000, pp. 1, 2

At the celebration of the first anniversary of Unity, some party leaders told journalists that in 2001, Yegor Stroev will be ousted from the position of the speaker of the Federation Council, and Sergei Popov, a Unity member, will replace him.

But the main events were happening not in the Kremlin but in the remote Ust-Ordynsky Autonomous District. The government of this remote region has officially announced that its delegate in the Federation Council will be Sergei Popov, head of the Unity Executive Committee. Unity leaders are planning to make Popov the speaker. As for Stroev, he will either be given a sinecure like a position in the State Council, or will have to leave the political arena.

Of course this scandal could be called an ordinary tiff between two politicians. However, it may also be considered in the light of predictions by many political analysts that the Senate will soon lose its significance.

DUMA DEPUTIES AND THEIR STAFF

Izvestia, December 27, 2000, p. 2

In 2000, maintenance of the State Duma cost the treasury 1.2 billion rubles, according to Nikolai Troshkin, Duma chief of staff.

At present, the Duma staff employs 1,883 people. Deputies have set up 28 parliamentary committees and 17 standing commissions.

In the previous Duma there were a number of scandals over deputies’ assistants. But there have been no such problems for the current Duma. Overall, 745 assistants are on the payroll. In regions, there are 1,856 assistants. Besides, there are many freelance assistants. All in all, there are 12,229 “helpers”.

The Duma is not experiencing any financial difficulties at present, although only 15% of allocated budget funding has been paid out for maintenance of the Duma staff.

REGIONAL LEADERS WANT TO DEFINE PUTIN’S POWERS

Izvestia, December 27, 2000, p. 2

A special working group of the State Council is developing a bill on state administration in the Russian Federation. In particular, they want the president’s powers to be clearly defined by law.

The working group is led by Moscow Mayor Yuri Luzhkov.

According to the authors of the bill, the president should not be accountable for all actions of the executive branch. Besides, it is necessary to stop the Cabinet’s functions being duplicated by the Presidential Administration. The working group also wants to determine the functions of the State Council, the Security Council, and other presidential advisory bodies. It is also necessary to change the procedure for dismissing the Cabinet.

MARSHAL SERGEEV’S MISSILE RESPONSE

Moskovsky Komsomolets, December 27, 2000, p. 2

A regiment of Topol-M intercontinental ballistic missiles was deployed on December 26, in the Tatishchevo garrison in the Saratov Region.

Strategic Missile Forces (SMF) commanders certainly want the nuclear shield to be maintained. Defense Minister Igor Sergeev is from the SMF. Besides, SMF Commander-in-Chief General Vladimir Yakovlev is rumored to be the main candidate for defense minister after Sergeev leaves.

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