MOSCOW (AP) - Russians aren't storming currency exchange booths to swap their dollars for euros yet, but the greenback's slide against the EU currency has sparked concern in the biggest dollar economy outside of the United States.
Exchange booths and banks are being swamped with questions, and government officials this week have been seeking to reassure a population still jittery after watching their own currency plummet in 1998.
"The dollar is the currency of choice in Russia, so for very many people this is worrying," said Oleg Kuznetsov, chief analyst at the Moscow Interbank Currency Exchange. "I wouldn't say that people see a crisis ahead, but they are anxious."
The euro has been climbing against the U.S. currency since April. Last week, it overtook the dollar for the first time in 2 1/2 years, reflecting renewed anxiety about America's economy. By Tuesday, the dollar had recovered slightly but the euro was still close to parity.
"I don't know what to think," said Grigory Sokolovsky, as he waited to change a pristine 100 dollar bill into rubles at a Moscow exchange booth. "It's probably all the same - euros, dollars. But the euro is suddenly very interesting. Maybe even more interesting than the dollar."
Most Russians hold their savings in dollars, and by some estimates, as much as dlrs 40 billion has been tucked away in mattresses, closets and shoeboxes. While some Russians decided to diversify their savings after the introduction of the euro notes in January, the majority hung on to the U.S. dollars they know so well.
The Russian government is also heavily dollar-dependent. The Russian ruble is unofficially pegged to the dollar, the country's budget is based on the dollar-ruble exchange rate and 80-percent of Russia's dlrs 42 billion gold and hard currency reserves are held in dollars, according to the Russian Central Bank.
The dollar's slide against the euro will cost the Russian government an extra dlrs 350 million when it pays off its debt to European countries and Japan, where the yen has also strengthened against the dollar.
"The gold and currency reserves could shrink, but we cannot say today that U.S. dollars should be urgently converted into euros," Deputy Prime Minister Alexei Kudrin, who is also finance minister, told Russia's RTR television this week.
Kudrin insisted that the country has the reserves - built up during an economic recovery these last two years - to protect itself against currency fluctuations, and he urged Russians not to panic.
Their assurances seem to be working. Most exchange booths have no lines, and while some reported running out of euros, the majority still have the bright-colored euro notes in stock.
"People are asking a lot of questions," said Diana Maduabem, who works at an exchange booth in central Moscow. "But so far, they aren't exchanging big sums."
Some economists are even predicting that the dollar's slide could ultimately benefit Russia.
Peter Westin, an economics analyst with Aton Capital Group in Moscow, said that many Russian export tariffs, such as those on oil products, are set in euros so the strengthening of the European currency will bring in more rubles to the dollar. He estimated that Russian government coffers could gain as much as dlrs 245 million from these tariffs.
The appreciation of the euro should also help Russian producers by making European imports more expensive and Russian exports more competitive, said Yevgeny Gavrilenkov, chief analyst with Troika Dialog.
"It may open a window of opportunity," he said.
Economists also noted that because Russian assets are denominated in dollars, they will become cheaper which may lure back investors, who have remained wary since the 1998 financial collapse.
"All in all, for Russia the benefit is greater than the cost," Westin said.
But exchange booth worker Ira Brusmenova said the customers she has dealt with don't see it that way. Many are headed off to Europe on summer vacations, and the hundreds of dollars they've saved up for the trip - in many cases in order to bring home shopping bags of duty-free purchases - won't go as far as they planned.
"It couldn't have come at a worse time," said Brusmenova.