To boost its ruble, Russia may bar mention of dollar

April 17, 2006|By ERIKA NIEDOWSKI | ERIKA NIEDOWSKI,SUN FOREIGN REPORTER

MOSCOW -- There's a new dirty word in Russia: dollar.

In a move intended to boost confidence in the Russian ruble, the head of a Kremlin advisory group has proposed barring references to American greenbacks - and euros - in the course of official business as well as imposing fines on bureaucrats who publicly express prices in foreign currency.

Yevgeny Velikhov, secretary of the Public Chamber, sent a letter to parliament last week proposing legislation that he says will help break the stereotype that the ruble is unstable and encourage Russians - and the rest of the world - to give it respect.

"It is becoming a bad tradition in Russia to count everything in dollars and euros," the Interfax news agency quoted Velikhov as saying. "It is about time to start respecting our own currency, especially taking into account that it is already stronger than the dollar."

The ruble's stature could be raised this summer at the meeting in St. Petersburg of the Group of Eight leading industrialized nations. Velikhov suggested that Russia's delegation use only rubles when presenting financial data and that a conversion chart be given to other delegates.

"Let them convert rubles into dollars themselves," he said.

Russia's economy is booming, thanks in large part to the high price of oil (which is always priced in dollars). And the ruble has recovered significantly from its lows in the 1990s, when it lost more than 99 percent of its value through official devaluation and a lack of confidence in Russia's future.

Rubles are now the only legal currency for most business transactions. But the press, many Russian government agencies and even President Vladimir V. Putin invoke dollars when referring to everything from budget surpluses and gross domestic product to the price of desirable Moscow apartments.

Velikhov says that's an insult to the ruble, which he calls an "undeservingly underestimated currency." If Russians don't respect it, he says, how can the rest of the world?

Vladimir Gruzdev, a member of parliament, said the fact that many prices are still expressed in foreign currency is a psychological holdover from the days when public confidence in the ruble was shattered.

"Nowadays, when the economy is stable and inflation is more stable, we should return and express things in rubles," he said. "When American politicians speak out on the economic situation in the United States, do they talk in U.S. dollars, Russian rubles or Chinese yuan?"

While fear of inflation is a continuing concern, there are signs of greater confidence in Russia's currency. In a February survey by the Levada Center in Moscow, 40 percent of the respondents said they preferred to keep their savings in rubles rather than dollars or euros, up from 35 percent in July.

But a recent effort to boost the ruble's status ended in failure. A group of designers and a prominent publishing house launched the national Sign of the Ruble contest to devise an easily recognizable symbol for the currency, such as $ for dollar. Six designs were chosen as finalists, among them symbols that looked like a pretzel and an inverted peace sign. But the Central Bank eventually withdrew its support for any changes.

Boris Gryzlov, speaker of the State Duma, the lower house of parliament, expressed interest last week in reviewing Velikhov's proposal to make the ruble the sole currency in domestic matters, saying that it "deserves to be the monetary unit referred to in Russia at all levels, wherever possible."

It was not immediately clear how much the fine would be for breaking the ban, should it become law, but it would probably be less than 5,000 rubles, the limit for administrative violations.

That is less than $181, or 149 euros.

erika.niedowski@baltsun.com

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