Experts see the Soviet promise to devalue the ruble by 50 percent over the next two years as a welcome gesture - but still just a gesture.
"Officially a ruble costs about $1.60, but on the black market - in Tunisia, say - you can get four, five, six rubles for a dollar," said Murray Feshbach, research professor in demography at Georgetown University and a specialist in Soviet economics. "So a 50 percent devaluation is only a start."The devaluation by January 1990 was announced in the Soviet press on Friday. In the following year, an entirely new rate is to be established.
Under the Soviet decision, the first devaluation will be only for trade purposes, so foreign visitors in Moscow will not find their vodka or hotel bills any cheaper in terms of their own currency.
"It's very different from making the ruble into a convertible currency," said Christian Paddet, an economist with Chase Manhattan Bank in New York.
Soviet officials have been saying that convertibility is their ultimate aim but it is likely to be many years before that takes place.
In the major capitalist countries, currencies are freely convertible; marks can be freely bought for yen and dollars can be freely sold for francs, at prices set by international markets.
This has never been the case with the Soviet ruble.
Feshbach said the decision had been expected, and is an indication that the Soviets are more ready to face economic realities.
He suggested that the new exchange rate, when it is actually applied, could help Western businesses that engage in joint ventures now being encouraged by the Soviets.
A ruble with a lower value in terms of dollars or marks could be an advantage to such enterprises if the cheaper ruble enables them to spend less of their own currency to pay for Soviet labor or goods.
"Of course, that depends on the prices the Soviets set," Feshbach said.
"If they raise the prices at the same time as they devalue, the advantage would be reduced."