Russia's allies should reduce their use of USD and Euro, appeals Russian

Tashkent: Russia will be stressing transactions in the national currency with its trading partners. Denis Manturov, Minister of Industry and Trade of the Russian Federation, appealed that these countries also should reduce the use of USD and Euro. ‘Russia has organised an international Trade Fair’ in Tashkent, the capital of Uzbekistan. The Russian Trade Minister appealed while addressing the member countries of ‘BRICS’, ‘SCO’ and ‘EAEU’ groups at the exhibition.

Moreover, Russia’s trade minister warned the allies, citing current developments in the world and the global economy. ‘The developments of the present time indicate how we are going to develop industrial cooperation among ourselves and the direction in which we will take the economy. If we want to have more freedom in our dealings with each other, we need to stop using the US dollar and the Euro and start dealing in national currencies,’ the Russian trade minister said. Trade Minister Manturov also claimed that without the use of USD and Euro in joint ventures and projects between Russia and its allies, transactions would be easier and more convenient.

The United States and its allies have imposed heavy economic sanctions on Russia in the wake of the war in Ukraine. Under the sanctions, Russia has been denied access to the international banking transaction system ‘SWIFT’. At the same time, Russia has been denied permission to utilise a major chunk of its foreign reserves, held in various countries, including the United States. Many leading banks, including Russia’s central bank and large companies, have been banned from trading in dollars and euros.

As an alternative to these sanctions, Russia has proposed using the Ruble and Yuan and the local currencies for other countries. Countries like China and India, who are big trading partners of Russia, have accepted the proposal and have already started transacting with Russia. Now Russia has signalled that it is stepping up its efforts to expand the scope. The statement made by the Russian minister at the international exhibition is a part of it.

The Eurasian Economic Union (EAEU) is a group of five countries formed on the initiative of Russia. China has set up the Shanghai Cooperation Organization (SCO) to maintain its influence. BRICS includes India, China, Brazil, South Africa, and Russia’s major economies. Its member countries are allies of Russia. As per the information shared by the Russian minister, Russia’s trade with the countries of these three groups increased by 38% in 2021. The member countries of these groups account for about 50 per cent of the international economy. Given this, it would be important for these countries to start trading in local currencies with Russia, Minister of Industry and Trade, Denis Manturov, indicated.

Last year, Russian President Vladimir Putin claimed that the United States is finishing the importance of the USD as the reserve currency. Bank of Russia Governor Elvira Nabiullina claims that the use of the US dollar by international markets, including Russia, has waned and that other currencies are now being used in international trade. With the outbreak of the Russia-Ukraine war, some of the world’s leading nations may reconsider their share of the US dollar in their foreign exchange reserves, warned Gita Gopinath, deputy head of the International Monetary Fund.