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. Last Updated: 07/27/2016

Yeltsin Calls For Recoup Of Savings

President Boris Yeltsin said Thursday that indexation of savings deposits held in Sberbank, the state savings bank, will begin in mid-March, but did not give any details of a compensation plan that could cost countless trillions of rubles.


Yeltsin made the comments in his hometown of Yekaterinburg, during a speech formally announcing his intention to run again for the presidency in June.


"We are beginning to restore public savings starting this year by indexing savings in Sberbank," the Russian president said. "We will do what we can to return to people, and primarily elderly people, what they have earned during their lifetime."


Following the speech, he told reporters that a presidential decree and two government resolutions to this effect are being prepared, Interfax reported Thursday.


While the exact nature of the plan is as yet unclear, Yeltsin appeared to have in mind compensating for savings eroded by the galloping inflation which followed the freeing of prices in January 1992.


The ruble rapidly devalued in the first three years of the economic reforms, and basic prices have risen 3,000 to 5,000 times over the last four years.


The government has granted account-holders lump sum payments in the past as partial compensation for losses, but the amounts did not nearly match their initial deposits. Sberbank now holds 119 trillion rubles in assets.


A Sberbank official reached Thursday refused to comment on Yeltsin's indexation plan.


A senior Western economist said he had heard of similar plans in recent years, "but I haven't seen anything about compensating the savers that I can make heads or tails of yet."


Economists' estimates have put a price tag of $9 billion to $16 billion on recent presidential spending pledges.