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Saturday, March 24, 2007

Putin the Hypocrite

The Scotsman reports:

President Vladimir Putin on Wednesday watered down plans to ban officials from using the word "dollar" after Kremlin bosses, and Putin himself, found it hard to kick their habit and use "roubles" instead.

Russian deputies last year gave initial approval to a draft law that would have fined government ministers for using the words "dollars" or "euro" when "roubles" could be used.

But the Kremlin's top brass, including Putin and First Deputy Prime Minister Sergei Ivanov, have continued using dollars to price major transactions and spending.

Putin signed a decree calling for officials "to refrain" from using pricing in foreign currency, with the exclusion of foreign deals, but the decree, published on the president's Web site,, said nothing about penalties or fines.

Deputies also heavily amended a draft law on using the word "rouble", removing mention of fines for ministers before passing the bill, also on Wednesday, by a majority in the lower chamber, which is controlled by the pro-Putin United Russia party.

The U.S. dollar triumphed as the currency of choice in Russia after the fall of the Soviet Union as roubles were so volatile that many Russians would change their wages into the currency of their Cold War foe as soon as they were paid.

Backers of fines for ministers said the rules would have boosted pride in Russia's currency and draw a line under the chaos which accompanied the fall of the Soviet Union.

The rouble has risen against the dollar as the biggest oil boom since the 1970s has boosted Russia's foreign revenues and swells government coffers.

Last year the rouble appreciated 4.3 percent against the central bank's dollar/euro basket, and some Russian producers say the strong rouble is eating into export profits.

Some leading Wall Street banks have even advised buying Russian roubles, once seen as a highly volatile currency by traders after the 1998 rouble devaluation.

In his annual news conference in February, Putin used the word "dollar" nine times, according to the Kremlin. Ivanov has used dollars to price arms sales.

Last May, in a first reading of the law approved on Wednesday, ministers who used the word "dollar" could have been fined about 5000 roubles ($192) for each offence.

At the time, Russian Finance Minister Alexei Kudrin branded such fines as absurd, as so many international transactions are priced in dollars and euros.

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