The controls were lifted on Saturday in accordance with a government decision taken on Thursday.
Alexei Kudrin, the finance minister, said on national television: "Now it will be more attractive to invest in Russia - this will increase investors' interest in Russia.
"On the other hand, 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.
Vladimir Putin, the president, had pushed for the reform to be approved this year instead of 2007 as planned.
Alexander Zhukov, the deputy prime minister, said that bringing forward the reform was justified because Russia's macroeconomic situation was stable, large gold reserves had been built up (worth $247 billion by June 23), the rouble was stable, the budget was balanced and foreign investment exceeded capital outflows.
Recent moves to begin trading oil and gas in roubles would help build confidence and increase demand for the Russian currency, Zhukov said.
Several analysts pointed out earlier that some points remained unclear and some controls would stay in place such as a limit on transfers intended to combat money-laundering.
However analysts had mostly welcomed the abolition of currency controls.
Troika Dialog investment house said in a report: "By relinquishing control over the flow of capital into and out of Russia, the Kremlin is effectively taking more responsibility for its actions.
Convertibility is also part of a "a line-up of positive news on Russia" ahead of the G8 summit in Saint Petersburg on July 15, including a deal with the Paris Club of creditor countries on repayment of a $22 billion debt, said Alexei Bulgakov of the Aton Capital investment group.
These signs of economic stability are in stark contrast to August 1998, when Russia defaulted on $40 billion of domestic debt and the rouble went into free fall as Russians sought to withdraw their savings and buy dollars.
The crisis, which happened despite a $22.6 billion loan from the International Monetary Fund (IMF), scared away foreign investors from the country and triggered an unprecedented flight of capital from Russia.