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5 Mar, 2010 15:51

Move from rouble mooted for economic union

First Deputy Prime Minister Igor Shuvalov has suggested that that a currency union between Russia, Kazakhstan and Belarus would be "the next logical step."

Speaking at a Moscow conference Shuvalov said that a currency alliance between the members of the customs union, which is planned to become a single economic market in 2012, will be modeled in the EU, which introduced a new currency rather than adopting an existing one. Shuvalov noted that “I won’t exclude a transition to a common currency union with these countries in the future,” although he added that talks on this had not yet taken place.

Andrei Kostin, head of VTB Group, added that the three nations, with Ukraine also being invited to join, would need to increase trade in national currencies in order to bring about a new currency, and said the rouble could play the currency role for the single economic market.

“I see no reason why rouble could not play this role. Rouble is a convertible currency at the moment, it is a strong currency, and of course taking into account the size of the Russian economy, I think it could be quite logical. But it’s a difficult decision because we have to do a lot of changes, adopt many decisions, and think it many times before introducing this, because definitely such a move will have a very substantial effect on the Russian economy."