The controls were lifted in accordance with a government decision taken Thursday.

"Now it will be more attractive to invest in Russia -- this will increase investors' interest in Russia," Finance Minister Alexei Kudrin said on national television, adding that he expected no capital flight from Russia to result from the reforms.

"Russian businesses can freely, without worry, without any special permit or burden, participate in investments" in other countries of the former Soviet Union or elsewhere, Kudrin said.

Kudrin added that he hoped the ruble would come into common use in transactions between companies in neighbouring ex-Soviet states -- effectively a challenge to the omnipresence of the dollar.

"When the ruble starts to be used among our trading partners, Belarussian enterprises for example will settle their accounts with Ukrainian enterprises in Russian rubles," Kudrin told the state-run RIA-Novosti news agency.

Russian President Vladimir Putin had personally pushed for the reforms to be approved this year instead of 2007 as previously planned.

Deputy Prime Minister Alexander Zhukov said that recent moves to begin trading oil and gas in rubles would help build confidence and increase demand for the Russian currency.

Early implementation of the reforms had been made possible he said by a stable macroeconomic situation, the large gold reserves Russia had built up (worth 247 billion dollars by June 23), the ruble's stability, the balancing of the budget and increased foreign investment flows.

"Foreigners will gladly put funds into the Russian economy," Zhukov told RIA-Novosti.