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Yeltsin Fires Central Bank Chief

November 8, 1995

MOSCOW (AP) _ President Boris Yeltsin fired the government’s top banker Wednesday in a move that aimed to appease parliament but instead raised questions about Russia’s commitment to lowering inflation.

Central Bank chairwoman Tatyana Paramonova has been credited with tight monetary policies that have helped bring inflation to record lows and stabilize the ruble for the first time since 1992.

Further shaking Western confidence, Paramonova was temporarily replaced by her first deputy, Alexander Khandruyev, a man believed to be less committed to tight money. How long he will remain at the helm is unknown.

The reshuffle comes at a tense time for the Russian economy, now showing the first real signs of stabilization since the beginning of market reforms in 1992.

The government is negotiating up to $12 billion in new International Monetary Fund loans and is trying to get the 1996 budget through parliament before Dec. 17 elections.

Yeltsin issued the decree from his hospital bed in Moscow, where he is being treated for a heart ailment.

The move was widely expected after the State Duma, parliament’s lower house, failed twice this summer to confirm Paramonova’s nomination. She took over in October 1994 and had stayed on as acting chief.

Many lawmakers opposed to Paramonova, who cut state credits to groups the lawmakers represented.

Paramonova has been instrumental in modernizing the Central Bank to suit Russia’s emerging market economy, and was recently rated fourth among world central bankers by Global Finance magazine.

But she has been criticized for tightening reserve requirements and mishandling a growing tide of bank insolvencies.

Yeltsin could have resubmitted her appointment to parliament or kept her on as acting chief. He apparently decided not to risk another failure.

``It would be wrong to maintain such a situation. After long thoughts, the president took the decision,″ Alexander Livshits, Yeltsin’s top economic adviser, told the Interfax news agency.

Livshits indicated Yeltsin is considering naming someone else to the permanent post. Among the candidates are Livshits, former Finance Minister Sergei Dubinin, Promstroibank president Yakov Dubenetsky and Dmitry Tulin, Russia’s representative at the IMF.

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