The Central Bank reports for 1994
the Central Bank has prepared a definitive variant of the report for 1994. Occurrence of this document right now it is no wonder. In - the first, were defined short-term priorities of the Central Bank (a subject of special pride - rouble exchange rate growth) and began possible appropriate amount to place accents in the report. In - the second, members of parliament have demanded to bring some results of activity of the Central Bank, to take out the final decision concerning Tatyana Paramonovoj`s further destiny. Rather optimistical tone of the report should convince everything that to Bank of Russia on a shoulder any problems.
Central Bank Position inconveniently. Optimism
In effect Is required, position of the Central Bank of Russia is rather original. On the one hand, he, as well as other national banks, is interested first of all in stability of monetary circulation. On the other hand, in the conditions of a total inefficiency of the Russian manufacture the Bank of Russia is compelled to incur financing of all economy, redistributing those few resources that remained in the country, and covering their shortage with monetary issue and inflationary credits - anything else simply it is not necessary to do. However, the government, having proclaimed the rigid financial policy, now counts on resources of the private capital. But these hopes become more and more illusive - in the conditions of crisis these resources are too insignificant (on the contrary, in Russia the private capital hopes for the help of the state).
it is clear that finally all again will address to the Central Bank. Therefore its position is now unenviable - the Central Bank should resort to really refined, but to maneuvers not guaranteeing success to keep at least visibility of financial stabilisation. It is obvious that during these maneuvers it will be alternately exposed to criticism that from the government, from businessmen, especially commercial banks. In such position, naturally, it is necessary to show the compelled optimism only. Such is sense of the report presented by Bank about results of 1994: last year in Central Bank activity all was not too bad, and that was bad, is already corrected.
it is especially amusing that the report begins with an impressing picture of last year`s crisis of the state finance of the western countries: the budgeted deficit of Italy has made 9,6 % of gross national product, Great Britain - 6,9 %, Canada - 5,8 %. Total state loans of the industrial countries have reached record size $955 billion On this background deficiency of the Russian budget in 65,3 trln roubles (10,4 % of gross national product) really looks not so catastrophically. Thus the Central Bank has safely confessed that has given out in 1994 to the Ministry of Finance on a covering of a budgeted deficit credits at a rate of 48,1 trln roubles (meaning that in 1995 to reproach him in similar “ inflationary “ it will be already impossible for practice, as in the new budget it have officially refused).
However, and last year the Central Bank did all that could to keep within the limits of crediting co-ordinated with IMF. For example, the Bank compensated expansion of delivery of credits to the government reduction of crediting of commercial banks which as a result have received three times less, than was planned. Besides, as it is underlined in the report, last year gradual transition from the centralised refinancing of banks to distribution of credit resources at auctions (all thus it has been distributed 895 mlrd roubles) has begun; the system of pawn and reregistration credits has been officially created. And that 14,9 trln roubles nevertheless has been given out in the form of the centralised credits, the Central Bank considers quite normal - eventually, this figure has been co-ordinated with the international financial organisations.
a subject of special pride of the Central Bank - creation in 1994 of the effective market of the state securities. The obligations taken before IMF about a covering of a budgeted deficit of 5 % at the expense of placing of such papers are executed. Implicitly it is meant that the Central Bank can solve this year and 50 % of budgetary deficiency are ready more a major problem of a covering at the expense of placing of securities almost.
considering that now the Central Bank rather actively advertises the successes in business of an increase in exchange-value of rouble, the description of heavy struggle containing in the report which the Bank conducted last year in the currency market quite naturally looks. As it is underlined in the document, in the first half of the year 1994 of the Central Bank has achieved increase in the currency reserves almost on 38 % - they have grown from $5,8 mlrd to 8 billion It has allowed Bank to constrain the accelerated falling of a rouble exchange rate in III - IV quarters which as self-critically recognised Bank, speaks basically essential increase in crediting of budgetary deficiency. However, dollar restraint was spent by sharp reduction of currency reserves which only for III quarter have fallen to $4,2 billion In August - October the volume of currency interventions of Bank has made $3,7 billion At last, with pride admits the report, with the help “ operative measures “ the dollar has been stopped.
towards to the report for 1995
Than this year will differ from the past, already is approximately clear. For example, the Central Bank will really use the best efforts to avoid direct crediting of the state budget. And it, most likely, will be possible to it - it will be necessary to maneuver more actively only in the market of the state securities. As far as possible the government will try to provide purchase by Bank of these papers at primary placing, and anyway the Central Bank will play a key role the secondary market.
it is clear that the special rate will be made on continuation of a manipulation by the rate of exchange. The dollar rate decrease seems to the authorities attractive at once for the several reasons. In - the first, it serves almost as the basic formal certificate of success of a rigid financial policy. In - the second, proceeding growth of the internal prices does obviously unprofitable an investment of money in dollars and stimulates the population and businessmen to an investment of money in the state securities. In - the third, the falling dollar exchange rate serves as a certain justification of increase of import duties as allows to declare that importers and so win from a course too much. At last, in - the fourth, he allows the Central Bank to fill up periodically the currency reserves, and purchase of dollars at a stock exchange appears almost a compulsory measure necessary for restraint of rouble and stabilisation of the market.
basically, all is natural. The Central Bank tries to use the control over the rate of exchange on - to a miscellaneous. In 1994, in an inflationary rating of economy, it used dollar growth, selling currency at the raised prices, - and by that, reducing currency reserves, withdrew from a turn very considerable rouble weight (that was spent under the slogan of the currency interventions necessary for restraint of a dollar exchange rate), preventing an inflationary collapse. Now artificial falling of a dollar exchange rate is used by Bank for currency purchase at the cheap price - eventually, financial crisis of the state proceeds, and the currency is necessary to it more than ever. If last year there was an annoying reduction of currency reserves this year the Central Bank hopes seriously them to fill up - as on it draws the West.
however here there are also problems. Certainly, from - for a low exchange rate the roubles spent for its purchase, are saved, however anyhow the Central Bank, buying dollars in considerable scales, thereby throws out in a turn the next portion of issue roubles that, by the way, already causes concern of the western experts. Moreover, banks and exporters who now sell dollars, can then consider that the course has enough fallen to redeem them back - and then the Central Bank again it is necessary to leave the reserves.
VICTOR - IVANOV