by Nina Achmatova

Moscow continues by issuing Eurobonds denominated in rubles in order to promote the national currency. Meanwhile, the Kremlin has set up a team of experts to carry out this mission.

Moscow (AsiaNews) - Russia is pushing ahead with its plan to create a major international financial centre and promote the ruble on foreign markets. Experts say the potential is there but the road to facilitating the flow of capital will be a long one.

Yesterday, the Russian Minister of Finance Alexiei Kudrin said that Moscow intends to continue its emission of Eurobonds denominated in rubles, after launching the first in recent days, for a period of seven years and worth 40 billion rubles, amounting to 1.36 billion dollars. "I think it's only the first issue, in the years ahead we will continue this practice and will organize a new segment of the international market, the Eurobond denominated in rubles," said Kudrin. The initiative, he said, is "an important step forward for the organization of an international financial center in Russia and the promotion of our national currency on international markets." The project was launched in 2008 by President Dmitri Medvedev, on the eve of the global economic crisis, and now experts are wondering how much Russia is actually going ahead in its implementation. The think-tank Z / Y, which biannually ranks the world's financial centers, in September, placed Moscow 68th place out of 75 in September, without any major improvements. The rankings are based on several criteria: how well known the centre is on a global level, the breadth and wealth of its business and the specialization of its industrial sectors. The Russian capital is behind cities like Milan, Warsaw, Stockholm and Glasgow. St. Petersburg is only the 71st place.

Around 47% of the first issuance of Eurobonds in rubles was purchased by British funds and companies and 26% by US funds and companies, with 4% ending up in Russian hands.

Experts, however, also point out some progress. Early last year, trade between China and Russia was denominated in Yuan or in Rubles on MICEX. Early in February, shareholders in MICEX index, denominated in rubles, signed an agreement of intent to acquire control of rival index, the RTS, denominated in dollars. The initiative should pave the way for a single stock exchange, with the aim of increasing liquidity and improving market infrastructure.

The man charged by the Kremlin to make the dream of Moscow becoming a major international financial center come true is Alexander Voloshin, close to Boris Yeltsin and former president of mining company Norilsk Nickel. Voloshin has put together a group of experts to carry out this mission and President Medvedev has formalized the group of consultants with an official decree.

The project was outlined at the recent World Economic Forum in Davos by the head of the Russian state: "The international financial center (Moscow) has become not only the center of the Russian financial system, but also an accelerator of financial markets across the post-Soviet area". The appointment of the new mayor of the capital Sergei Sobyanin, much closer than his predecessor Luzhkov to the central government should facilitate the undertaking. But in order to attract capital and ensure political stability, it will be fundamental to fight corruption, reduce bureaucracy and ensure the independence of the judiciary. All goals at the top of the agenda of the Russian leadership. At least in words.

• Russia
• Moscow
• financial
• centre
• rubles
• investment
• development
• politics
• transaprency