Ruble Plunges to New Low Amid Economic Worries

The Russian ruble collapsed to an all-time low against the dollar on Thursday as government economists grimly predicted that prices and unemployment would keep rising in the next 18 months.

Losing 20% of its value in just days, the shaky Russian currency plummeted to 205 rubles per dollar at a currency auction here. It is the first time the rubles-per-dollar exchange rate has exceeded 200, the Itar-Tass news agency and Russian television said.

The unexpectedly sharp drop prompted the Central Bank to consider reverting to its old policy of propping up the ruble with an artificially high exchange rate, the Russian media reported.

By withdrawing the ruble--even temporarily--from the free market, the Central Bank would deal a major blow to President Boris N. Yeltsin’s plans to make the Russian currency convertible around the world.

Coming just a day after the International Monetary Fund offered a vote of confidence in Russia’s program for economic reform, the ruble’s plunge took many economists here by surprise and reflected continuing uneasiness among Moscow businessmen about the country’s future.

Since the end of June, the bank has allowed the ruble to float, its value determined by twice-weekly currency auctions. But the latest slide may prompt the bank to take emergency measures, Tass said.

Yet even as banks and small companies were frantically selling off rubles, the Russian government signaled its confidence that the economy would soon stabilize. Yeltsin’s Cabinet, led by acting Prime Minister Yegor T. Gaidar, met Thursday to map the outlines of a 1993 budget--a move that presupposes a predictable ruble value for the upcoming year.

In the first eight months of this year, skyrocketing inflation has made it impossible to plan expenditures. As a result the government has been forced to draw up a new budget each quarter. “We would like to have a normal budget this time,” said Alexei V. Ulyukaev, head of a group of government advisers, who noted the Cabinet plans to submit a budget for all of 1993 to the Russian Parliament by mid-October. The tentative budget assumes a 7% to 8% monthly or 100% annual inflation rate, Ulyukaev said.

Russia must pull its monthly inflation rate under 10% by year’s end to qualify for a massive infusion of aid from the IMF. A top IMF official said Wednesday that inflation here had fallen to 7.5% in July but said the drop was too short-lived to indicate a reliable trend.