Russia gradually ditching US dollar in trade with allies

Russia gradually ditching US dollar in trade with allies

PEJOURNAL – A senior Russia lawmaker says his country is gradually reducing the role of the US dollar in financial transactions with allies and commercial partners, a long-pursued measure aimed at using currencies other than the greenback to offset the impacts of American sanctions.

Vyacheslav Volodin, the speaker of the Russian parliament’s lower chamber, the State Duma, made the announcement on Thursday and said Russia was gradually reducing the share of the US dollar in the Russian economy and foreign exchange reserves.

“For example, within the framework of the EAEU, settlements in national currencies have grown to 74%. We are systematically increasing trade in national currencies with China and Turkey,” Russia’s Kommersant business daily quoted Volodin as saying, referring to the Eurasian Economic Union, a trade bloc with an integrated market of 180 million people.

The State Duma speaker underlined that, in late February, Russia changed the currency structure of the National Wealth Fund, including the Japanese yen and the Chinese yuan.

Volodin also said that the share of US dollar and euro decreased from 45% to 35% at that time, while the share of the pound sterling remained at ten percent.

Head of Russia’s upper house of parliament — Federation Council — earlier said that the US dollar would remain in circulation in Russia but the economy’s dependence on the American currency must be reduced.

Valentina Matvienko also said Russian gold and foreign exchange reserves are already much less dependent on the dollar, and that Moscow’s investments in government obligations of the US have decreased 30 times over the past ten years.

Moreover, Deputy Foreign Minister Sergei Ryabkov said in an interview with Bloomberg television news network last month that Russia must take urgent steps to cut its use of the dollar to a minimum as the new US administration of Joe Biden signals it will ramp up sanctions against Moscow.

Ryabkov stressed that Russia needs to reduce the role of the dollar in any operations, eliminating “dependence on this poisonous source of constant hostile actions.”

The Russian diplomat said Washington has imposed more than 90 rounds of sanctions in recent years that targeted state banks and corporations, the oil and gas sector, top officials and business tycoons and is likely to add even more restrictive measures.

Relations between the US and Russia remain strained over such issues as Syria, Ukraine and allegations of Russian interference in the 2016 US presidential election, which Moscow denies.

In the latest move, the Biden administration imposed sanctions against seven senior Russian officials and 14 entities over the case of opposition figure Alexei Navalny, who Western governments say was poisoned last year.

Under the sanctions, the assets of those targeted will be frozen and US companies and individuals will be effectively barred from doing business with them.

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