Russian President Vladimir Putin has called on the member nations of the Commonwealth of Independent States (CIS) to reduce their reliance on external influence by increasing the use of national currencies in trade. Speaking at the CIS summit in Bishkek, Putin emphasized the importance of creating a sustainable financial infrastructure that is independent of outside forces. He also emphasized the need for wider utilization of national currencies in trade and investment operations.
To achieve this goal, Russia intends to actively contribute to efforts aimed at expanding the use of national currencies in trade. This includes collaborating with member countries’ financial and economic institutions, as well as their central banks. The push to reduce dependence on the US dollar and switch to national currencies has gained momentum among developing nations, particularly since the implementation of Western sanctions against Russia due to the conflict in Ukraine. These sanctions severed Russia’s ties to the Western financial system, which is predominantly denominated in US dollars and euros.
The CIS, a regional organization that includes Russia and many former Soviet republics, such as Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Uzbekistan, Tajikistan, and Turkmenistan, provides a platform for member nations to collaborate and enhance their economic cooperation.
By promoting the use of national currencies in trade, CIS countries can shield themselves from external influences and reduce their vulnerability to potential economic and financial disruptions caused by fluctuations in global currencies. This move aligns with the ongoing trend of de-dollarization, as countries seek to diversify their currency reserves and reduce their exposure to the dominance of the US dollar in international trade and finance.
In recent years, various nations, including Russia and China, have taken steps to establish alternative payment systems and promote the use of their national currencies in international transactions. The goal is to create a more multipolar and balanced global financial system.
The shift towards greater reliance on national currencies has several potential benefits. First, it reduces the risk of being subject to the financial and economic policies of dominant global powers. By conducting trade in their own currencies, CIS countries can insulate themselves from possible disruptions linked to sanctions or other external pressures.
Second, using national currencies can reduce transaction costs and facilitate smoother trade operations. When trade is conducted in different currencies, businesses often face additional costs related to currency exchange and hedging against currency fluctuations. Switching to national currencies can streamline these processes and make trade more efficient.
Moreover, increasing the use of national currencies in trade can enhance economic cooperation among CIS nations. It fosters closer ties and strengthens regional integration, creating a more robust and resilient economic environment for member countries. By reducing the reliance on foreign currencies, CIS nations can also reduce their exposure to exchange rate risks and enhance their economic stability and sovereignty.
In conclusion, President Putin’s call for CIS countries to rely more on national currencies in trade is a strategic move towards reducing external influence and strengthening economic cooperation within the region. By establishing a sustainable financial infrastructure and expanding the use of national currencies, CIS nations can safeguard their economies and enhance their resilience in the face of external pressures. This trend aligns with the global movement towards de-dollarization, as countries seek to diversify their currency reserves and reduce reliance on dominant global currencies.