Lower inflation elevate the rouble's role: Kudrin

KIEV: The Russian rouble's role in global trade will increase if the government manages to cut annual inflation to a stable 3-4 percent, Finance Minister Alexei Kudrin said on Saturday.

"In order to make the rouble more widely used, we need to address a series of macroeconomic indicators," Kudrin said after a meeting of finance ministers from the Commonwealth of Independent States in the capital of Ukraine.

"If Russia moves to 3-4 percent inflation a year, and keeps it at that level for five-six years, this will indicate a new quality of the currency."

Fiscally-prudent Kudrin has long called for increasing efforts to fight inflation, which has plagued post-Soviet Russia and threatens to overshoot the central bank's target of 6-7 percent in 2011.

So far this year, consumer prices have risen 4.8 percent and the government is counting on a good harvest and the traditional abundance of fruit and vegetables in the summer to push prices down.

Russia has long sought to make Moscow a major global financial centre and elevate the rouble's role in international trade. But so far only a small percentage of Russian export contracts are charged in roubles, chiefly with former Soviet republics.

Kudrin said that although he sees the rouble already "fully convertible," the country needs time to prove the stability of both the rouble and its economy.

"We need a little bit of established history to show that the government and the central bank will strive for low inflation along with other macroeconomic indicators," Kudrin, the Group of 8 longest serving finance minister said, adding for now Russia's inflation level does not allow to reach those goals.

COPYRIGHT REUTERS, 2011