Skepticism About New Government Depresses Ruble

MOSCOW — The ruble shed 38% of its value in a renewed downward slide Wednesday amid fears that Russia’s new government plans to print money--and probably provoke still-higher inflation--in an attempt to get out of economic crisis.

But President Boris N. Yeltsin told German Chancellor Helmut Kohl by phone that Russia, in crisis since a de facto devaluation of the currency in mid-August, is now “normalizing.”

The ruble’s troubles last month led to both financial panic and a political crisis, the latter partly resolved last week when a new, compromise choice for prime minister, Yevgeny M. Primakov, was confirmed by parliament. On the political front, Primakov continued peacemaking between Russia’s fractious centers of power Wednesday by choosing three new deputy premiers.

But skepticism over Primakov’s economic intentions has now set in. The Soviet-era spymaster has frightened markets by bringing an ill-assorted group of ministers into the government who are likely to fall out over the direction of the economy.

Primakov’s first appointments were big spenders from the Soviet era; he has also said he wants to focus more than his predecessors did on reviving domestic industry, almost certainly an expensive task.

The ruble’s value dropped from a high of 7.5 to the dollar Tuesday to an official level of 12.45 by Wednesday. It was selling at exchange offices on the street for between 14 and 15 to the dollar.

Ruble prices had been artificially buoyed in recent days by banks pushing for a better rate before they paid off hard currency debts to foreigners--but it changed course Tuesday afternoon once futures contracts had come due.

Inflation for the first half of September shot up to 43%, the Central Statistics Commission said.

Delegates from the International Monetary Fund visiting Moscow this week kept silent about whether the international financial organization will deliver a $4.3-billion installment of credit to Russia in October, part of a $22.6-billion deal agreed on in July. The IMF is opposed to a return to inflationary policies in Russia.

“The prospects of receiving the second tranche are not very rosy,” said Deputy Prime Minister Alexander N. Shokhin, one of Wednesday’s three new appointees as vice premier.

Shokhin, a centrist who says he is against printing money as a way of solving Russia’s problems, has been put in charge of financial issues. He will handle negotiations with the IMF. Another member of his Our Home Is Russia political faction, Georgy Boos, was appointed head of the State Tax Service on Tuesday, replacing liberal economist Boris Fedorov.

Confusion remained Wednesday over the status of Fedorov, who was highly respected in the Western investment community and also served as a deputy premier in the previous government. Alexandra Ivashchenko, a spokeswoman for the tax service, said it was likely that Fedorov would be leaving the government, but there was no announcement from Yeltsin.

Besides Shokhin, the two other deputy premiers appointed Wednesday are also seen as moderate reformers. Vladimir Ryzhkov has been parliamentary leader of a pro-government faction and Vladimir P. Bulgak was the science minister in the previous government.

Yuri Maslyukov, a moderate Communist and former head of the Soviet planning department Gosplan, was appointed first deputy premier last week, and Viktor Gerashchenko--a proponent of printing rubles--was chosen to head the Central Bank.

Primakov came to power after Yeltsin fired a previous government that pursued tough policies, including threatening to force unprofitable companies into bankruptcy and improving tax collection.