What Russia Can Reap From Its Ruble Fiasco

It had all the hallmarks of a Soviet-style edict. Suddenly undertaken, the Russian Central Bank's move to gather in all bank notes issued before 1993 threw citizens into a panic. Central Bank Chairman Viktor Geraschenko acted while both President Boris Yeltsin and Finance Minister Boris Fyodorov were out of Moscow and Yeltsin modified the decree on his return. But the Russian government's credibility was damaged all the same.

Still, some good may come of the call-in. Yeltsin's arch-

enemy, parliamentary speaker Ruslan I. Khasbulatov, roundly denounced the Central Bank, which, while nominally independent, is answerable to the Congress. This might be a good time for Yeltsin to maneuver the Central Bank out from under the purview of Congress. He might fire the bank's top managers and force it to act more in concert with the Finance Ministry, which has many reformers in its ranks.

Equally important, the currency fiasco should prompt more former Soviet republics to introduce their own currencies and break away from the so-called ruble zone, which has never functioned properly. Numerous republics have continued to use the ruble, even while their own central banks set widely differing policies. Meanwhile, about 20% of the ruble credits pumped out to enterprises last year by the Russian Central Bank went to non-Russian companies.

Now, the Central Bank may have forced the republics to realize that they must depend on themselves--and adopt their own currencies and monetary management. For those that have already done so, results have been mixed: The Baltic republics, especially Estonia, have had some success battling inflation after introducing their own currencies. Ukraine, however, which also has its own currency, has failed to maintain monetary discipline. But at least the financial uncoupling of the republics would remove an unworkable vestige of the Soviet system and deprive Russia's Central Bank of yet another excuse for mismanagement.