Zee Beam News

12/ 05/ 2006 MOSCOW, May 12 (RIA Novosti) MOSCOW, May 12 (RIA Novosti) - Russia will lift restrictions on bringing capital into and taking it out of the country from July 1, the finance minister said Friday. "On July 1, Russia will lift restrictions on import and export of capital that have been in place since the default of [August] 1998," Alexei Kudrin said. "We have accumulated the necessary potential to be considered a country with a fully stable currency whose stability is guaranteed for many years ahead in any circumstances," Kudrin said. The move is part of Russia's bid to make the ruble fully convertible by the middle of this year. President Vladimir Putin in his state of the nation address Wednesday said work on ruble convertibility should be finished by July 1. Kudrin said following Putin's speech the measures set out in it were realizable. The ruble will formally be considered convertible from January 1, 2007, when all restrictions on foreign currency operations will be abolished under a new law on currency regulations. But the law gives the Central Bank the right to impose certain restriction on capital transactions until that time. The Finance Ministry said earlier it was considering abolishing all restriction before the date stipulated by the law. The Central Bank said last month it could take years to make the ruble fully convertible, and that convertibility could only happen after Russia creates a full-fledged financial markets infrastructure. Sergei Kamburov, deputy director of the Central Bank's department for operations on financial markets, said external demand for the ruble as a global financial instrument was almost non-existent, and Russian financial markets are not developed enough to make the ruble an efficient alternative to the U.S. dollar. Politicians have recently floated the idea of making the ruble the only currency circulating on the domestic market. The pro-presidential United Russia faction also recently backed a proposal by the head of the Public Chamber to ban MPs and officials from using the terms "dollar" and "euro" in domestic economic debates.