Increased use of local currency in the Russian sponsored ‘Eurasian Union'

Moscow: Information has been received that the use of local currency bypassing the use of US dollar has increased in the Eurasian Union created with the Russian initiative. As per the information provided by Russia, 70% of the transactions in the first six months of 2018, by the members of the Eurasian Union were in the local currency. Against this background, Russian President, Vladimir Putin has stated that many countries are looking for an alternative currency, due to the instability in the US dollar and efforts to develop a system for transacting in currencies other than the US dollar are also underway.

Senior Russian official, Sergei Prikhodko informed ‘In the first six months of this year, the proportion of local currency transactions between the members of the Eurasian Union has gone up to 70%. Economic stability, common financial market and coordination of the financial sector management will help in increasing this share. The largest chunk of the local currency trade is with Russia and all these transactions have been completed in Ruble.’

A meeting of Eurasian Intergovernmental Council was held in the Belarus capital of Minsk. Against the background of the conference, this information regarding the local currency trades has been released. As per sources, topics like policies in the economic and finance sector, unified financial market, combined crude oil market were discussed along with the trade cooperation. The Countries Belarus, Kazakhstan, Kirgizstan, and Armenia along with Russia are members of the Eurasian Union. Other than these, Moldova has been included as an observer in the Eurasian Union.

The Eurasian Economic Union, active since 2015, represents 180 million people and has a total GDP of 5 trillion USD. Russia is trying to bring all the countries together, formed after the disintegration of the USSR in 1991, and the Eurasian Union is said to be the part of the same efforts.

Meanwhile, Russian President, Vladimir Putin has warned that the influence of the US dollar is declining in the world and the United States itself is responsible for this. During a function organised in the Russian capital Moscow, President Putin said that Russia is not going away from the US dollar, but the US dollar is going away from Russia.

The Russian President said ‘Russia has not kept any target to reduce the use of the US dollar. The US dollar itself is distancing itself from us. The people imposing sanctions are not shooting in the leg but at themselves. Many world economies are trying to find alternatives because of the instability in the US dollar and moves are being made to develop of a separate system to handle these transactions bypassing the US dollar.’