Russian Central Bank Chairman’s Tenure Seen Slowing Inflation

A decision by Russian lawmakers not to accept the resignation of the country’s central bank chairman will probably prevent the onslaught of hyperinflation, Mikhail Berger, economic editor of the prestigious Russian newspaper Izvestia, said Friday.

“This gives hope that the country’s strict monetary policies will not be radically changed,” Berger said.

Georgy G. Matyukhin, chairman of the Russian Central Bank, quit earlier this week, declaring that he could not do his job because the legislature was demanding that he lower interest rates and the government was forbidding him to do so. Parliament on Wednesday rejected his resignation.

At the government’s request, the bank has set interest rates at 80% a year, still well below the current inflation rate of more than 740%. The lawmakers, afraid that business won’t be able to pay such a rate and be forced to close, wanted interest rates cut to 50%.

Berger said that Matyukhin’s resignation was really an attempt to gain the legislature’s approval to stick closer to the tougher monetary policy that the government favors. “Resigning is very popular political show business in Russia,” Berger said.