Russia ready to ‘de-dollarise’
Its government is working on measures to stimulate the use of alternative currencies
RUSSIA’S government is working on measures to stimulate use of alternatives to the dollar as the Kremlin steps up efforts to cut dependence on the US currency amid fears of new US sanctions.
The government is working on “reducing our economy’s dependence on the American currency, including through stimulating and the creation of mechanisms to shift foreign-trade settlements to national currencies,” according to a statement from the cabinet’s press service published on official news agencies yesterday. The authorities have “no plans to give up dollar settlements, ban the circulation of the dollar or impose any other restrictions,” it said.
Russia has long struggled to limit its reliance on the dollar because of the relative stability of the US currency and its use to price Russia’s main commodity exports. The greenback remains a popular asset for Russian savers, still wary of the rouble after several deep devaluations over the last two decades.
But as the US Congress has pushed in recent months for further steps to punish Russia for alleged election meddling, fears have grown that major banks could be cut off from the US financial system and the government has stepped up its efforts to develop alternatives. Economy Minister Maxim Oreshkin said that the government is working on additional steps to make using national currencies more attractive and less costly.
“First of all, these are stimulative measures to make these operations simple and convenient for companies and the population,” he said, noting that they require working with other countries to integrate financial infrastructure.
Last month, Andrey Kostin, head of state-owned VTB Bank, announced his own plan for “de-dollarisation.” It would take about five years and include increased usage of local currencies in international trade, re-registering major companies in Russia and using local financial infrastructure for Eurobond issues, he said.
The government said its efforts aren’t driven by any “personal initiatives”, but “reflect the strategic line of the government.”
President Vladimir Putin supports the move to reduce reliance on the dollar, Kremlin spokesperson Dmitry Peskov said on Tuesday. “This is a very complex process,” he said. “It can’t be quick and will take time.”
Russia has for years called for shifting more of its transactions with China and the EU, its main trading partners, into yuan and euros, while operations with its former Soviet neighbours could be done in roubles. But progress has been slow. | Bloomberg