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Russian Warns Against Devaluation

July 9, 1998

WASHINGTON (AP) _ Devaluing the Russian ruble would lead to increases in food prices and other commodities that would provoke widespread social unrest in the country, Russian Ambassador Yuli Vorontsov said Thursday.

He said Russia needed $10 billion to $15 billion from the International Monetary Fund to stabilize the currency from attacks mounted mainly by domestic speculators. Negotiations between the Russian government and the IMF on a multibillion-dollar loan package are continuing in Moscow.

Russian President Boris Yeltsin has pledged not to devalue the ruble.

Pointing out that many workers in Russia go unpaid for periods ranging from six month to two years, Vorontsov said, ``To increase prices in this situation would spark very, very unpleasant things in Russia.″

He said Russia did not need criticism of its economic policies by the international community or members of Congress but ``advice, assistance, support and understanding.″

Vorontsov welcomed Deputy Treasury Secretary Lawrence Summers’ approval of Prime Minister Sergei Kiriyenko’s emergency package of laws to strengthen public finances. He said he expected the Russian parliament to approve it before its summer recess next Thursday.

Vorontsov said Russia’s economy was not on the brink of collapse and current difficulties would be overcome.

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