The continued use of a single exchange rate for the rapidly falling ruble is "suicidal", Viktor Gerashchenko, the acting Central Bank chairman, declared Monday.


Reporting to legislators on the bank's policies, Gerashchenko said he favored reintroducing the old system of separate ruble rates, depending on the operation concerned, but did not elaborate.


He also defended his policy on issuing credits to industry, saying that the Central Bank was trying to stave off the "death of Russian industry".


But acting Prime Minister Yegor Gaidar, who recently advocated a return to the tight monetary polices that characterized the first half of the year, told a meeting of industrialists in Moscow on Monday that he expected to bring the bank's position to fall into line with that of the government, Itar-Tass reported.


"The government is trying to remove the factors that destabilize the credit and monetary situation, primarily those connected with the reduction of the budget deficit and abolition of cheap credits", Gaidar said. "We hope for close cooperation from the Central Bank in removing the factors weakening the monetary and credit policy".


Gaidar and Gerashchenko have been at odds in their public statements about economic policy at a time when falling purchasing power has sharply eroded confidence in the government. Both men, who were appointed to their current posts during the summer, have to be confirmed by the current session of parliament. The ruble has dropped steadily since the Russian government introduced a single ruble exchange rate against the dollar on July 1. At the time, the single rate was seen at the time as a major step toward convertibility, but that has now been postponed indefinitely.


At the Moscow Interbank Currency Exchange last week, the ruble dropped 55 points to a record low of 309 rubles to the dollar. Some economists estimate that the currency could soon fall beneath 500 rubles to the dollar.


The lower the ruble sinks, the more expensive imports become, including badly needed staple goods and equipment for spare parts for industry. The Central Bank has intervened to support the ruble by selling $600 million, or nearly half of the hard currency that has been sold on the exchange since the creation of the single rate, Gerashchenko said.


Some cabinet members, notably Gaidar and Economy Minister Andrei Nechayev, have criticized Gerashchenko for failing to support the ruble.


"People say the fall in the ruble is my fault, because of my lack of belief in a convertible ruble", Gerashchenko said. "I say that is because of inflation and the lack of income from export"


Gerashchenko also denied that Central Bank was acting against the interests of the Russian government by issuing cheap credits to industry.


The bank chief said he favored issuing credits to "normally working" enterprises or to those that make staple products or for projects such as the conversion of loss-making military enterprises.