Russia rules out weaker rouble

Russia's central bank enjoys a high level of independence

Sergey Ignatiev, the man expected to become the new head of Russia's central bank, has said he does not want to see any "serious" changes to the country's exchange rate policy.

Mr Ignatiev has been put forward as the new bank chief by President Vladimir Putin, and his appointment is expected to be approved by parliament by the end of the week.

His comments came as Russia's central bank stepped in to support the value of the rouble, which fell on Monday morning following the weekend resignation of bank chief Viktor Geraschenko.

Mr Geraschenko - nicknamed Hercules for his experience, independence and boldness - was highly praised for stabilising the exchange rate of the rouble after the financial crisis of 1998.

But he was criticised by the finance ministry, bankers and the president for delaying of much-needed banking reform and for giving dubious credits to some banks.

Russia's central bank was also criticised by some government members for its monetary policy, which prevented the currency from weakening to help Russian exporters.

No devaluation

Mr Ignatiev - who is currently first deputy finance minister - has excluded any quick devaluation of the rouble.

Mr Igantiev worked at the central bank ten years ago

"Devaluation has its pluses and minuses, but I think the latter overweighs," he told a Russian newspaper.

"I am against any serious changes to the rate policy," he added.

Mr Ignatiev is not new to the bank. He served as its deputy head in early 1990s, when market reforms started in Russia.

In his current position he is responsible for the government's relations with the central bank, and is likely to bring a more pro-government style to the job.

Great expectations

Analysts expect him to begin a long-awaited reform of the banking system and drop Mr Geraschenko's tough line on safeguarding bank's independence.

Mr Gerashenko was nicknamed Hercules for his independence and boldness

A new bill, currently under discussion in parliament, gives deputies and the president's administration a final say in the central bank's operations.

Meanwhile, Mr Igantiev is playing down any expectation of sharp changes in the bank's policy.

The most probable reason for that is that the head of the central bank has to be approved by the parliament, which usually opposes any move leading to liberalisation of the banking industry.