Vyugin Vows to Curb Supply of New Rubles

Oleg Vyugin, one of the country's newly appointed top Central Bank officials, pledged Wednesday to rein in money printing by the bank to curb inflation, although his consumer price inflation forecast was slightly above the official target.

Vyugin, who worked as chief economist at Troika Dialog before becoming first deputy Central Bank chairman Tuesday, said the Central Bank should work out new ways of controlling liquidity.

But he ruled out any sudden end to adminstrative tools used to control money markets, saying Russia's fragile economy was "not yet normal."

"We should assess some of these mechanisms and create new ones that would allow us to control inflation and money supply more tightly," Vyugin told State Duma lawmakers, who must approve his nomination.

Vyugin said the CPI index for the year could slip past the government target, but would come in below 15 percent.

The 2002 budget sets the CPI target at 12 percent to 14 percent.

"I think we can easily limit ourselves to 15 percent," he said.

Vyugin told the budget and banking committees that he stood by forecasts for the ruble rate he made when working in the private sector. "I will not shy away from the prediction I made when I worked at a commercial structure: 33 rubles. Maybe a bit lower," he said.

The 2002 budget sets the average ruble/dollar rate at 31.5, with the year-end target at 33. A ruble/dollar rate independent of export revenue inflow would be preferable for Russia, he added.

"It would be good to create such mechanisms of rate regulation that would be immune to foreign trade trends," he said. "The ruble should firm in the limits of economic growth."

On Tuesday, Vyugin said the real rate of the ruble should go down.

 The Duma banking and budget committees Wednesday supported the candidacies of Vyugin, Andrei Kozlov and Nadezhda Ivanova for the Central Bank's board of directors, Prime-Tass reported. The committees recommended that the Duma vote to approve the candidates as Central Bank board members on April 24.