Greater role for the Rouble makes export-import easier

President Dmitry Medvedev has continued his predecessor’s promotion of the rouble as a regional currency, with the government continuing to explore the proposal with business representatives.

The Dollar, Euro… or the Rouble. For wine importer, Simple Wines, dealing with currencies is a daily chore.

The Russian company buys wine from hundreds of producers in more than 15 countries. To keep things simple, it conducts most transactions in euros.

The General Director, Maksim Kashirin, backs the idea of floating the rouble. The market, not the central bank, would set the rouble’s exchange rate.

For small and medium size enterprises working in the import-export business, the  predictability of the rouble rate is most important. If the Rouble became a reserve currency, that would help us hedge our risks.

The U.S. economic crisis has made the world's main reserve currency, the dollar, more volatile and prompted demands for financial reform. For Russia it's offered a chance to promote the rouble as a reserve currency, at least on a regional level. Another advantage for Russia, as a large oil exporter – is to sell its resources in roubles rather than in dollar-denominated contracts.

But if the rouble were freed too quickly, the inflow of energy earnings would quickly push the exchange rate sky high. Deputy Finance Minister Dmitry Pankin notes that as a national currency it is shielded from some trading risks,

With the rouble just a national currency, we can guard it from volatility on the international financial markets. If it's a part of trading system, it will face trading risks.

The Rouble has already gained 30% against the dollar during the current oil boom. Importers have begun quoting their wholesale prices not in euros, but roubles, expecting to gain financially from further rouble appreciation.

When it does float the rouble, the central bank is expected to do so GRADUALLY, to stop the rouble from appreciating too fast and hurting exporters.