The Kremlin yesterday dismissed persistent rumours in US financial markets that the President, Mr Boris Yeltsin, would be forced to step down amid Russia's deep political and financial crisis.
"The press service categorically denies this and declares that it is stupid," said Mr Alexei Gromov, deputy chief of the Kremlin press service. Traders said the rumours had boosted the dollar against the mark in New York.
Traders said rumours were going around that the acting Prime Minister, Mr Viktor Chernomyrdin, had the backing of the Russian military to unseat Mr Yeltsin, who has come under pressure from opponents to resign amid a worsening financial crisis.
Mr Yeltsin, currently staying at a country residence outside Moscow, was in regular telephone contact with Mr Chernomyrdin over the crisis, Mr Gromov said earlier. Mr Yeltsin's next public engagement will be to meet visiting Bulgarian President, Mr Petar Stoyanov, tomorrow. There is, however, undoubtedly mounting pressure for Mr Yeltsin to resign, or at least surrender some of his powers. Parliament yesterday worked out a deal to shield him from prosecution in retirement if he agrees to alter Russia's balance of power.
A tripartite commission made up of representatives from both houses of parliament and the outgoing government drew up a draft political agreement to be submitted to Mr Yeltsin under which he would sign away some of his wide-ranging powers.
In return, the deal obliges the Communist-dominated State Duma lower house to prepare a law on political and social guarantees for the president once he has stepped down, whether after a presidential election due in 2000 or before.
It would also stop impeachment proceedings now under way.
"We want Russia to have a strong parliament. Therefore the president must share his powers both with the government and with parliament," said the Communist Duma speaker, Mr Gennady Seleznyov.
Under the deal, constitutional amendments would be proposed by president and parliament within a month of its signing, which the powerful Communists are insisting is done before they will approve Mr Yeltsin's prime ministerial nominee, Mr Chernomyrdin.
Mr Seleznyov and the Communist Party leader, Mr Gennady Zyuganov, have stepped up calls for Mr Yeltsin to step down, saying only his resignation and new presidential elections can resolve a financial crisis gripping the country.
They are also calling for a coalition government.
But Mr Seleznyov said yesterday he did not think prominent Communist deputies should join the government, raising doubts over Communists' willingness to take responsibility for the country as it slides towards financial collapse.
Some observers see the calls for Mr Yeltsin's resignation and a coalition government as a tactical way of piling pressure on the president to sign away some of his powers.