Russia Looks to Conduct Trade in Currencies Other than US Dollar

Anticipating new sanctions by the US government, in spite of the friendly tone that US President Donald Trump struck with Russian President Vladimir Putin during their last meeting in Helsinki in June this year, Russia is looking to establish its foreign trade in currencies other than the US Dollar. The Ministry of Finance and the Bank of Russia, the country’s central bank, are said to be preparing a plan to adopt measures that could lead to the use of Russian Rubles, Chinese Yuan or even European Union Euros to transact its international trade. They will submit their proposals to Prime Minister Dmitry Medvedev shortly.

 

Being called “de-dollarisation”, Russia already sees the bulk of its international trade, approximately 60%, taking place with the EU and China. This would anticipate an easy switch to the euro and the yuan, but it is expected to be carried out in a phased manner so as not to disrupt the current state of the economy. On a more promising note, the move to conduct trade payments in their individual currencies is something that both President Putin and Chinese Premiere Xi Jinping have talked about earlier. It is also anticipated that any trade that Russia engages in with the former nations of the Soviet Bloc would be carried out in rubles.

 

Speaking about this matter last month, President Putin said, “We will certainly be moving in this direction. Not because we want to undermine the dollar but because we want to ensure our security, because they are constantly slapping sanctions against us and are simply denying us an opportunity to use the dollar.” While this has been the biggest factor motivating de-dollarisation, economic analysts believe that in the present political and economic climate of global trade, the move could prove beneficial as the US continues to impose sanctions against countries, as well as import tariffs against its allies.