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. Last Updated: 07/27/2016

Bank Head Offers to Quit, Duma Will Decide

President Boris Yeltsin signed a decree Friday relieving Viktor Gerashchenko of his duties as chairman of the Central Bank after the banker tendered his resignation to Yeltsin during an unpublicized Kremlin meeting.

However, both liberal and conservative members of the State Duma, which under the constitution has the final word on dismissal of the bank chairman, said they believed the bank chief would stay on.

Constitutional experts said Yeltsin did not have the power to fire Gerashchenko.

"It is the Duma's exclusive power to appoint and dismiss the Central Bank chairman, according to Article 103 of the constitution," constitutional scholar Vladimir Lafitsky said in a telephone interview.

In a precedent earlier this year, the resignation of Public Prosecutor Alexei Kazannik was accepted by Yeltsin but not by the Federation Council, the upper chamber of the Russian parliament. Kazannik had to stay on until he persuaded the Federation Council that he no longer wanted the job, a sentiment Gerashchenko has never demonstrated.

Exactly why Gerashchenko offered his resignation was unclear, but former Finance Minister Boris Fyodorov, who now heads the parliamentary subcommittee supervising the Central Bank, called the controversial banker's resignation "a cat and mouse game."

"Gerashchenko is unsinkable and he will almost certainly stay afloat," the ex-minister said.

Yeltsin asked the Duma on Wednesday to dismiss Gerashchenko in the wake of the "Black Tuesday," when the ruble dropped almost 28 percent to 3,926 per dollar, but the Central Bank has since driven the dollar down so that it only fetched 2,988 rubles Friday.

In an apparent effort to take the decision on Gerashchenko away from the Duma, Yeltsin on Friday withdrew his request for the deputies to sack the bank chairman, on the grounds that he had already resigned.

Some analysts and politicians have suggested that the Central Bank chief is knocking down the dollar simply to hang on to his post.

"I told the Duma it had to act fast and fire Gerashchenko if it did not want the ruble to go up to six per dollar, like before the reforms," Grigory Yavlinsky, head of the liberal Yabloko faction, told reporters at the parliament.

But notwithstanding such cynical remarks, most legislators seemed confident that Gerashchenko would survive.

"Gerashchenko will stay on," opposition leader Sergei Baburin said.

Responding to rumors that Fyodorov was being tapped for Gerashchenko's job by reformist factions, Irina Khakamada, who co-chairs the December 12 Union faction with Fyodorov, said she, too, believed the bank chief would keep his job. "Most factions will vote to keep Gerashchenko on, and the more people talk about replacing him with Fyodorov, the more votes (he) will get," she said.

Gerashchenko has traditionally been the darling of the conservatives who have a majority in the Duma. A highly placed deputy who did not want his name used said Gerashchenko's resignation, if accepted, would hurt the Central Bank.

"Most of the Central Bank managers hold their jobs only because of personal commitments to Gerashchenko," the legislator said. "If he leaves they will move to commercial banks that can offer them much higher salaries."

Indeed, Gerashchenko's number two at the bank told Reuters that he other high-ranking colleagues might also resign if Gerashchenko goes.

"I am a member of a team and cannot imagine another leader," said Central Bank first deputy chairman Arnold Voilukov.

-- Svetlana Vinogradova contributed to this article.