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Russian ruble acquires official symbol but keeps falling

December 13, 2013, 15:33 UTC+3 Alexandrova Lyudmila
Russia's Central Bank Deputy Chief Georgy Luntovsky at a special event summing up the results of public vote for ruble's symbol

Russia's Central Bank Deputy Chief Georgy Luntovsky at a special event summing up the results of public vote for ruble's symbol

© ITAR-TASS/Gennady Khamelyanin

MOSCOW, December 13. /ITAR-TASS/. Russian authorities are doing their utmost to make the ruble a strong currency and boost its status in the international arena. Speculations have resumed about turning the ruble into a regional reserve currency. Meanwhile, the ruble keeps falling versus the dollar and euro.

On Wednesday, the Bank of Russia (CBR) adopted an official symbol for the Russian national currency following an online poll. The approved symbol is a Cyrillic capital letter ‘P’ (pronounced like Latin ‘R’) with a horizontal stroke.

The symbol will be used in publishing exchange rates and on banknotes and coins. As soon as next year it will appear on one-ruble coins. The CBR is planning to actively promote the ruble’s logo to make it as widely recognizable and widespread as that of the dollar.

The Bank of Russia’s governor, Elvira Nabiullina, said the sign would strengthen the ruble’s status in the international arena. “This symbol will represent the Russian ruble in world markets,” she said.

However, pundits believe the CBR overestimates the sign’s significance. They say the currency’s strength primarily depends on the condition of the country’s economy.

“Any currency’s strength is not in its symbol, but in the development of the national economy. That the ruble now has an official sign will not settle any of the present economic woes,” believes a senior lecturer at the Higher School of Economics, Director of the FBK Institute for Strategic Analysis Igor Nikolayev, quoted by the Moskovsky Komsomolets daily.

The executive director of the Research Institute of History, Economics and Law, president of the organization of supporters for a strong national currency, called The Ruble, Igor Suzdaltsev, said on the news site aif.ru the just-approved emblem had a striking resemblance to the sign of the Philippines’ currency, the peso. The thing is the letters serving as the sign for the two currencies are pronounced differently but look alike. “The peso has two signs - either with two lines in the middle of the letter or one line under the letter’s semicircle, which makes the latter absolutely identical to our symbol.”

Suzdaltsev said that any currency sign had two main aims. The idea of easing business procedures inside the country has materialized - it will be easier now to write the ruble sign on price tags at shops and supermarkets and in financial news letters. However, the other aim that of making it easily recognizable abroad has not been reached. First, the sign will be inevitably confused with the Philippine peso. Secondly, there may follow some harm to the image from continued criticism and plagiarism charges.

All of a sudden some objections have been heard from the Russian Orthodox Church. Some clerics have noted the new sign’s resemblance to the christogram — the monogram of Christ’s name comprised of two superimposed initial Greek letters X and P. “The ruble sign introduced by the Central Bank copies the early Christian symbol of Christ — Chi Rho”, Archpriest Andrei Kurayev has written down in his live journal entry and called for a theological commission to be formed to look into the matter.

Meanwhile, the ruble’s promotion abroad has started already. Last week China allowed its free circulation within the limits of one border town, Suifenhe. For the first time in Chinese history the ruble has acquired rights equal to those of the Chinese national currency — the renminbi. Local people are allowed to keep savings in ruble cash and use rubles to pay for goods and services.

“Any ruble appearance in a foreign country is good for the national currency, it is a good promotion measure that indicates the ruble’s stability for other countries,” senior lecturer at the stock market and investment chair of the Higher School of Economics, Aleksandr Abramov is quoted by Rossiyskaya Gazeta as saying.

He does not discount the possibility the ruble may be admitted to other countries alongside China, for instance, at some popular destinations of Russia’s middle class — Spain, Bulgaria, Montenegro, Portugal.

However, the expert warns against exaggerating the importance of this event: “This is not the ruble’s victory, but a measure of promotion to give tourists greater comfort. Moreover, of late we have seen the ruble’s importance as a convertible currency fading. The volumes of trading in the renminbi launched on the Moscow Stock Exchange have increased, but ruble volumes on the Chinese exchange have not.”

In 2008, the then Russian president, Dmitry Medvedev, formulated an important goal the Russian economy, he believed, should be striving for. “Turning Moscow into a strong financial center of world importance and making the ruble one of the major regional currencies are the main components of our financial system’s stability,” he said.

Incumbent President Vladimir Putin’s proposals to set up a Eurasian Union sparked speculations about a currency union within the CIS.

Ambitious programs intended to make the ruble a regional currency are now inopportune in Russia, believes the director of the Center for Structural Research of the Gaidar Institute, Aleksey Vedev: “These are costly plans. We would have to take on other countries’ risks. The Bank of Russia will no longer be able to support or, on the contrary, weaken the exchange rate. And our economy is not prepared for this yet.”

In the meantime, since early autumn the ruble has been in constant decline. On November 27, it fell to a four-year low versus the bi-currency basket, 38.36, and kept falling. Experts have begun to discuss in full seriousness the risks of the ruble’s devaluation in view of both domestic and external factors.

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