Chief of Russia’s Central Bank Resigns, Blaming Split Signals

Amid the controversy over whether Russia is moving to a free-market economy too quickly or too slowly, the chairman of the country’s Central Bank resigned Monday, accused both of not sufficiently supporting the government’s reforms and of going beyond the will of the legislature in attempts to overhaul the economy.

Georgy G. Matyukhin, chairman of the Russian Central Bank, and his deputy told parliamentary leaders they could no longer function with the executive branch under President Boris N. Yeltsin going in one direction and the Supreme Soviet, the country’s legislature, pulling in another.

“My decision to resign is final in the present-day conditions,” Matyukhin later told journalists. Under Russian law, however, the resignations must be accepted by the Supreme Soviet before they become effective.

At issue Monday were interest rates. At the government’s urging, the bank increased its basic rate to 80% a year, which is still well below the current rate of inflation of more than 740% so far this year.

But lawmakers, fearing the closing of thousands of enterprises unable to pay such high interest charges, wanted the rate cut to 50% annually.

“The Central Bank is subordinate to Parliament,” Vladimir P. Rasskazov, the bank’s deputy chairman, explained later, “and its leadership can work and take on responsibility only as long as it is supported by Parliament. Now, we do not feel we have such support.”

Two more fundamental questions, however, are involved:

The first is who sets economic policy, the president or Parliament. Russia’s failure so far to delineate the responsibilities of each branch of government--the country continues to work under a Soviet-era constitution that vests all power in Parliament--has left in doubt who is in charge.

The second involves the country’s basic economic strategy, including the manner and the speed of its transformation from a centrally planned economy based on state ownership to one governed by the market forces of supply and demand, with private entrepreneurship the motive force.

As the controller of monetary policy, the bank has a key role in the reforms, but Matyukhin’s leadership has been controversial; first the government and then lawmakers wanted him replaced.

Yegor T. Gaidar, first deputy prime minister under Yeltsin and the architect of the country’s economic policies, supported Matyukhin and declared Monday that Parliament has to be prevented from making “horrendous decisions” such as cutting lending rates and lowering the value-added tax, according to Interfax news agency.

“We are afraid that the Russian Central Bank will yield to Parliament’s pressure and lower the lending rate,” Gaidar said.

Earlier this year, however, Gaidar accused Matyukhin of sabotaging the reforms by increasing the money supply and granting too much credit while the government was imposing tight controls; but as soon as they came to an agreement, the lawmakers objected that credit policies were too restrictive.

Alexander P. Pochinok, chairman of the Supreme Soviet’s Budget Commission, complained about the bank’s enforcement in recent months of Gaidar’s tight money policy, including severe shortages of actual cash.

“Strikes are beginning nationwide, triggered by the lack of cash to pay the workers--as if we don’t have real causes for them!” Pochinok said, complaining that the bank is failing to release and even print enough money to keep up with the rate of inflation.