COMBINED REPORTS


The Central Bank has hiked its key refinancing rate from 180 percent to 200 percent, the highest level since May, amid growing inflation and an increasingly rapid fall in the ruble's exchange rate against the dollar.


The bank announced the move Friday as the ruble fell 44 points to 3,667 on the Moscow Interbank Currency Exchange, or MICEX, and dealers warned that the currency's rapid devaluation could trigger an interbank payments crisis.


The ruble fell to 3,755 to the dollar in private interbank deals for Tuesday, from 3,720 late Thursday, suggesting that a further fall was likely Tuesday on the MICEX. Ruble-dollar trade was suspended Monday due to the Russian Christmas holiday.


Central Bank officials said last week that the bank had enough resources to avert a repetition of the Oct. 11 "Black Tuesday" currency crash, when the ruble fell to new lows of 3,926 per dollar.


Dealers were less upbeat.


"Would you buy rubles if you didn't have to?" asked Tom Reed, an analyst at AIOC Capital.


"An interbank payments crisis is certainly possible, and there is a precedent for it in Russia," he said, referring to a period last autumn when the gap between MICEX and interbank rates widened. The big Black Tuesday crash followed.


One dealer said it was now more profitable to play the difference between the bank rate and the rate set on MICEX than to use interbank credit markets.


Some banks were ready to risk nonpayment penalty fees to get money to play the market.


"It is getting to the stage where it is better not to pay on time and hold onto your money for a few days. If this goes on for another week there could be a nonpayment crisis," he said.


Dealers said the Central Bank sold about $110 million on the exchange both Friday and Thursday as demand for the U.S. currency soared due to expectations of higher Russian inflation and worries over the crisis in Russia's breakaway republic of Chechnya.


Monthly inflation in December hit an 11-month high of 16.4 percent, according to preliminary figures from the State Statistics Committee, bringing annual 1994 inflation to about 200 percent.


Economists expect monthly inflation to remain above 10 percent throughout the first quarter of 1995.


Central Bank officials consider it vital for the refinancing rate, which is applied to all credits granted to commercial banks, to remain above inflation in order to prevent massive borrowing that would push prices even higher.


Last year the bank continuously cut the lending rate from a high of 210 percent in April to 130 percent in August.


Following the collapse of the ruble in October, when the Russian currency plunged 21 percent in value against the dollar, the bank increased the rate to 170 percent.


Dealers said the hike to 200 percent would have no major impact on the hard currency market, as it had confirmed expectations of a rise in inflation.


"The ruble will continue to fall," said one dealer. "Inflationary pressures are mostly to blame, first because of Chechnya, and second because a lot of rubles came into the economy in December."


The dealer also said that the Central Bank had bought $100 million a day on MICEX in December and was now selling these dollars at a rate of $200 to $300 million a day. Banks that usually sold rubles were becoming buyers.


"A huge speculative game is going on," he said.