Kiev, Feb 28 (IANS): Ukraine's self-proclaimed Luhansk People's Republic will use the Russian ruble as its official currency, according to an official statement.

The ruble would be used in the pro-Russian territory as the basic unit of currency as of Wednesday, the statement said.

The use of the ruble, which is already used informally in the pro-Russian territory along with the Ukrainian hryvnia, serves to stabilise the volatile economic situation in the region, Efe news reported.

As of Wednesday, Luhansk's central bank will announce the value of the ruble against the US dollar, euro, and hryvnia.

The decision came just a week after Russian President Vladimir Putin signed a decree ordering the recognition of passports issued by separatist authorities in Luhansk and neighbouring Donetsk.

This allows residents to travel to Russia without the need for visas.

Russian Foreign Minister Sergey Lavrov said the measure was provisional and would be in place until the political situation was settled in East Ukraine on the basis of the Minsk agreements.

However, Ukraine said Russia's move not only violated its territorial integrity but was also not in compliance with the peace agreements of February 2015.