Medvedev Backs Ruble in Reserves

The ruble should become a regional reserve currency to protect the country from turbulence in global financial markets, President Dmitry Medvedev said Tuesday.

"In a situation of global financial instability, we need to set the task of making the rouble a regional reserve currency," Medvedev told VTB chief Andrei Kostin.

Russia, whose own gold and foreign exchange reserves of more than $500 billion are the world's third largest, runs a managed float of the ruble, keeping it stable against a dollar/euro basket.

Analysts say gold and forex reserve holders are usually not interested in holding nonfloating currencies in reserves due to political risks.

A fixed exchange rate regime or managed float imply that the currency's exchange rate is subject to a political decision of the government or the central bank.