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. Last Updated: 07/27/2016

Duma and Putin Give Ruble a Boost

VedomostiA bill approved by the Duma in a third reading Wednesday would outlaw advertisements with foreign currencies.
Legislation forcing advertisers to show prices in rubles passed in a third and final reading in the State Duma on Wednesday.

The bill received immediate endorsement when President Vladimir Putin issued a decree ordering state officials not to speak about domestic financial matters in currencies other than the ruble.

The legislation was a revised ­version of a previous bill, which had also envisioned outlawing the use of foreign currency in public speeches and the media.

Public Chamber chief Yevgeny ­Velikhov ignited debate on the issue in April in a letter to Duma Speaker Boris Gryzlov, in which he called for fining bureaucrats who refer to foreign currencies in public speeches. ­Velikhov also demanded a ban on the public use of dollar and euro symbols in Russia.

A draft of the bill submitted by the Duma's committee for Constitution and State Affairs in May 2006 ­reflected Velikhov's proposals and outlined a complete ban of price listings in dollars, euros or conditional units, which can be interpreted to mean dollars or euros, or the average of the two.

The final version of the bill jettisoned these stipulations, however, and stated only that advertisers must indicate prices exclusively in rubles.

"The law as passed Wednesday is mainly cosmetic and harmless, as all its extreme aspects have been completely cut out," said Aleksei ­Goriayev, a senior economist with the Center for Economic and Financial Research.

"Advertisers will only need to add a few more zeros to update their price labels," Goriayev said.

A presidential decree issued ­immediately after the bill was passed, however, has broadened the scope of the new law, obliging state officials to "desist from using foreign currencies to denote prices" of goods and ­services.

Because of the ruble's history of ­instability, the use of foreign currency has been popular in Russia since the early 1990s, with prices of apartments, cars, household appliances and ­airplane tickets commonly indicated in conditional units.

A Public Opinion Foundation survey in April showed, however, that 40 percent of respondents approved a ban on references to dollars and euros in official documents and speeches, while only 23 percent disagreed with the proposal.

"The essence of the law is to boost the status of the ruble," Deputy Duma Speaker Vladimir Katrenko said to journalists after the bill was ­approved.

"We want to raise the status of the ruble and we want the trust of our citizens in the currency to grow, and we aspire for the ruble to be recognized in international markets," Katrenko said, Interfax reported.

"I see nothing bad in state officials being reminded that the ruble is the only national means of payment ­permitted under the Constitution," Katrenko said.

Katrenko also said foreign currencies would continue to be used when and where necessary, such as when drawing up international contracts.

Before the bill becomes law, it must be approved by the Federation Council and then signed by Putin. The legislation is expected to come into force July 1.