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Soviet banks
to be given
free rein in
new system
MOSCOW: The Soviet Union took
its free-market reforms into the realm
of money this week, unveiling plans for
a banking system free of government
control and a new exchange rate for
foreign trade.
The country's top banker, Viktor
Gerashchenko, told a news conference
that legislation before parliament gave
bankers, and not the Government, the
right to decide monetary policy.
The new laws, to be implemented by
1991, are part of President Gorbach
ev's reforms, introducing a market
economy.
Mr Gerashchenko said the laws pro
vided greater financial autonomy to the
individual Soviet republics, many of
which have declared sovereignty and
are threatening to issue their own mon
ey.
Another key plank of financial re
form was outlined this week — an
exchange rate for the rouble, at present
not freely convertible to foreign curren
cy. There will be a change in the rate
applied to foreign trade transactions.
The new commercial rate might be
set at about two roubles to the dollar.
"With this commercial rate, around
90 per cent of our exports will be prof
itable, so there will be no question of
begging for subsidies from the Finance
Ministry. Definitely our imports will
be more expensive," Mr Gerashchenko
said.
• The US is considering establish
ing consulates in Soviet republics
where independence movements have
surfaced, and expects to open an office
in Kiev soon.
Raymond Seitz, assistant secretary
of state for European and Canadian
affairs, said on Tuesday that Moscow
would probably insist on establishing a
new Soviet consulate in America for
each new US office set up.
Mr Seitz said no formal talks were
under way to establish the consulates i
but the matter had been raised in "a
very informal manner".
— AFP, Reuter
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