Russian gas and oil should be paid for in Rubles, President Dmitry Medvedev told parliament in his first annual address. The President also highlighted the fight to boost the economy in the face of the global economic sl

Russia’s main export commodities – oil and gas – should command payment in Rubles.

Russian President Dmitry Medvedev sees it as one step towards making the Ruble a regional currency, and turning away from dollars in trade with third countries.  Ronald Smith, Head of Research at Alfa-Bank says it will take time.

“If the world turns to any regional currency – such as a Ruble – it’s only going to happen over time.   Over time banks will start holding more and more Rubles as a reserve currency etc, and, if that happens, it becomes one.    Its not something you can decree.  Governments can do all they want – in reality if you say we’re going to set prices in Rubles, market participants will still be looking at it converting it in their minds to dollars.”

President Medvedev stressed the need to pursue with a plan of action to minimize the consequences of the world crisis.

He said there should be no financial seizure, and government money injected into the financial system should reach it’s destination – the real economy, meaning agriculture and construction, machine engineering and the military industrial complex as well as small businesses according to Evgenny Nadorshin, Chief Economist at Trust Bank.

“The first to benefit, will be definitely those companies which managed, or will manage to get money from VneshEconombank.  But this will be, like, companies only.  Speaking about sectors – construction, agriculture, others which were in the list mentioned by Medvedev himself – they will get direct support from the Government.  Maybe there will be further sectors announced slightly later.” 

The President's address was repeatedly postponed – but came at a good time to highlight the role of international relations in tackling the financial crisis.

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