Russian rouble can ‘claim the role of reserve currency’

Russian rouble can ‘claim the role of reserve currency’



07 September, 2012, 21:19



Russia's President Vladimir Putin has said its possible to use the rouble as a reserve currency.
"We hear more and more statements about reserve currencies," the president said at the APEC CEO summit, claiming the "Rouble can claim for the role of reserve currency. The rouble is used more and more frequently in the settlements in the former Soviet republics," the president noted at the Asia-Pacific Economic Cooperation forum, being held in the Russian city of Vladivostok.
"The possibilities for the use of regional currencies should be expanded as well," Putin believes. "This will build up the international financial system," he added.

There are reasons to be optimistic about use of the Russian rouble in bilateral trade with Asia-Pacific countries, CEO of Russia’s Vneshekonombank (VEB) Vladimir Dmitriev believes.

“We hope that will be the case. In order to achieve the globalisation of the rouble as a currency bilateral or multilateral trade we as a bank and we as a state we use different channels bilaterally with China for instance and multilaterally inside that Shanghai Cooperation Organisation and within the BRICs group. There are obvious results which allow me to be rather optimistic than pessimistic in this regard,” Dmitriev told RT.

Russia hopes to start trading in national currencies within several international organizations and there are specific countries to talk about in this regard, he continued. “I would mention India, probably Brazil but in a later stage. China and India are obvious examples of that sort of cooperation. Of course this is an issue which is apart from the global task to make Moscow an international financial centre, and it's obvious that finding a proper solution we have to look at our neighbour countries like Ukraine or Kazakhstan and Belarus,” Dmitriev said. “In Ukraine and Belarus we have banks owned by VEB and among other things that task is to provide bilateral trade to be secured by the local currencies and the rouble first and foremost. It's not a very difficult issue we have to look at technicalities to do so but economically we are prepared to do that.”

Russian MP suggests ban on foreign currency transactions


RIA Novosti/Igor Samoilov
TAGS: Russia, Politics, Law, Currencies, Banking


An MP who represents the United Russia majority party has prepared legislative amendments that would make the Russian ruble the only valid currency in the country, and put an end to dependency on the US dollar and the Euro.
Yevgeniy Fyodorov described the initiative in an interview with the Izvestia daily newspaper. He promised that the proposed bill would be made public in autumn, and declined to provide any details before then. Fyodorov said that the bill could require changes to the constitution, and that “currently the rouble is tied to the dollar and therefore cannot be the national currency.”
Fyodorov has a degree in economics, but has been a politician since the late 80s. He is currently a member of the Supreme Council of the United Russia party, and the chairman of the State Duma Committee for Economic Policy and Entrepreneurship.
The MP has already made several controversial legislative proposals in the State Duma this year, including introducing the ‘foreign agents’ bill and the bill banning state officials from owning foreign property. Both initiatives found no support in the Lower House.
Fyodorov claims that his currency project is backed by the first deputy head of the Russian Central Bank, Andrey Ulyukayev: “Ulyukayev says that half of the gold and foreign currency reserves (over $250 billion) are not only of no good, but actually cause harm. Real resources were paid for this. We should change the national currency system in principle – launch the mechanism that will give no support to the US dollar and will not contribute to the US budget, that we had filled with about 10 Russian budgets, but support internal investment instead.”
The MP went on to claim that, since all investment in Russia is made through foreign credit organizations, Europe and America are financing the global financial crisis at Russia’s expense. “Not only this is a burden, this is unacceptable,” Fyodorov argued.
The idea was sharply criticized by other MPs and financial experts. Anatoly Aksakov, a State Duma deputy and the chairman of the Association of Russian Regional Banks, said that the government should promote ruble investment, but any bans in the economic sphere would only lead to capital drain. “Administrative regulation would only undermine the people’s trust in the ruble – everyone perceives the restrictions as a signal that all is lost,” he said.