After speaking with Condi Rice: Russia ends de facto dollar peg and moves to align rouble with euro

Russia said yesterday it had abandoned efforts to tie the rouble's movement closely to the dollar and switched to shadowing both the euro and the US currency.The move heightened expectations that other countries operating de facto dollar pegs, such as China, could follow suit.-Russia had announced its intention to introduce a basket arrangement last April but did not set a firm date for the change. The Bank of Russia, the central bank, has been building its euro reserves in readiness, with some 30 per cent of its reserves now estimated to be in euros, against just 5 per cent in 2000. Traders said it appeared Russia had begun to loosen its peg to the dollar in October, when the rouble began to strengthen against the dollar while the US currency fell strongly against the euro-The Bank of Russia said it has been using a basket consisting of 0.1 euro and 0.9 dollars to target exchange rate policy since February 1. With the euro trading near $1.30, this currently gives the euro a 13 per cent weighting in the basket. Link