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6 Jun, 2009 06:57

President pushes Rouble as regional reserve

In his highly anticipated keynote address at the St. Petersburg forum, President Dmitry Medvedev once again pushed the idea of the Rouble as a regional reserve currency.

In his speech on the first lessons of the global crisis, Medvedev suggested using a mix of regional currencies as a way to make the global economy more stable.

“No national currency can be appointed to the world's reserve. The role of the Russian Federation is to make the Rouble a more attractive, convenient, and reliable method of transaction for all those who are ready to use it.”

Deputy Prime Minister Igor Sechin dealt the greenback another blow at the forum on Friday. He said oil prices should not be tied to the dollar.

Russia is not alone in welcoming the winds of change – China and Brazil have echoed the idea of abandoning the greenback. Yet any nation with huge dollar holdings also fears the dollar’s collapse.

Russian businesses broadly welcomes the idea of reducing dependence on the dollar, according to Vimpelcom Head, Aleksander Torbakhov.

“Only for professional financiers and for professional players on that market is it acceptable to gamble on foreign exchange rates. We are professionals in another business and want to avoid foreign currency risk.”

Others including Pavel Teplukhin, a partner at Troika Dialog, are pragmatic, saying the dollar as the main reserve currency is here to stay:

“The U.S. is the largest economy in the world. It is the largest trade partner for most countries in the world. And, naturally, dollar is the most demanded currency in the world at this stage.”

Medvedev may discuss his proposal to create a new world currency when he meets counterparts from Brazil, India and China later this month.