HE WROTE THE BOOK ON RUSSIAN CURRENCY REFORM
Johns Hopkins University economist Steve H. Hanke, a leading expert on currency reform and the author of the only book on a currency board system for Russia, is available to discuss the current monetary meltdown in Russia, how it might impact the rest of the world, and what can be done to solve the crisis.
In fact, Hanke saw the current crisis coming. A columnist for Forbes magazine, Hanke predicted in his March 9th column ("Is the ruble next?") that the ruble was likely to blow up by mid-year.
"Can the ruble continue to hold," Hanke wrote then. "I don't see how."
Professor Hanke was most recently at the center of Indonesia's economic crisis. As President Suharto's closest economic advisor, Hanke was tireless in his urging the president to adopt his currency board reform package.
Hanke this year was named as one of the 25 most influential people in the world--along with President Bill Clinton, Bill Gates and currency speculator George Soros--by World Trade magazine. Last summer, Hanke helped Bulgaria adopt a currency board that stabilized its currency and halted rampant inflation.
Hanke is a leading authority on currency issues and wrote a book closely examining Russia's currency in 1993, titled, Russian Currency and Finance (Routledge, with L. Jonung and K. Schuler).
He is also special advisor to Petar Stoyanov, president of Bulgaria.
Professor Hanke has been following events in Russia closely and today offered the following observations on the crisis:
"The current situation is that, first, the ruble is a junk currency. There's only about 21 billion dollars in ruble cash floating around in Russia, and there's about 40 billion in U.S. dollars. Point two: The banking system is insolvent. And in fact banks aren't really banks, in the sense that they take in very few retail deposits from customers and they make few loans for investment."
To solve the currency crisis, Hanke said Russia needs to make dollars legal currency alongside the ruble; allow foreign banks to operate in Russia; continue to bolster the State Savings Bank; and adopt a currency board.
"Announce the currency board is going in," Hanke said. "Establish a currency board law. Then let the ruble float for 30 to 60 days to see what the market is for the ruble dollar exchange rate. And then fix the exchange rate permanently."
"This will work," Hanke said. "They desperately need a quick fix in Moscow, and a currency board is the only way to get it."
To arrange an interview with Professor Hanke on the current Russian economic crisis, or for assistance with logistics, please call Glenn Small in the Office of News and Information, at 410-516-7160 or [email protected].
Professor Hanke can be reached directly, at Hopkins, at 410-516-7183, or at home at 410-889-1828.
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