08/13/1998 07:16:49 Russia c.bank says Soros idea wouldn't end crisis
MOSCOW, Aug 13 (Reuters) - International financier George
Soros's proposal to devalue the Russian rouble and peg it to
the dollar or euro would not solve the country's financial
crisis, a senior central bank official said on Thursday.
Deputy central bank chairman Denis Kiselyov told Reuters
that Russia's existing foreign exchange policy -- based on a
broad corridor with a pivotal rate of 6.2 roubles to the dollar
-- would help avoid a banking crisis. Soros made his proposal
in a letter to Thursday's edition of the Financial Times.
"A one-off devaluation of 15-25 percent would not solve a
single one of the problems facing the Russian government,"
Kiselyov said by telephone. "At the same time it could really
destabilise the markets which would, of course, create
additional opportunities for speculative games."
He said there was no long-term crisis in the banking
system. The central bank's assessment was that as long as
Russia stuck to a non-inflationary foreign exchange policy
there were no grounds to fear a banking crisis, he added.
Soros, whose views on currencies often move markets, said
Russia would need 50 billion of reserves to back a currency
board, whereby it would be committed to exchanging roubles for
dollars or euros at a set rate.
Soros said this rate should be 15 to 25 percent below the
current exchange rate, to reflect the global oil price fall.
((Irina Demchenko, Moscow newsroom, 7 095 941 8521,