The Venezuelan foreign minister announced that the two countries, Moscow and Caracas, are moving towards de-dollarization and are seeking to switch to national currencies in trade soon. The progress was made public during Venezuelan Foreign Minister Yvan Gil Pinto’s three-day official visit to Russia, where he was speaking at a joint press conference with his Russian counterpart Sergey Lavrov. Pinto stated that both Moscow and Caracas are currently working on the technical and technological aspects of transitioning to national currencies in their trade agreements. He expressed confidence that they would be able to shift away from the US dollar and start using their local currencies in cross-border transactions “very soon.”
Pinto also highlighted the trend among leading developing nations, particularly the BRICS countries (Brazil, Russia, India, China, and South Africa), to pursue de-dollarization in order to reduce the influence of the US dollar. This global trend began to gain momentum last year following the Ukraine-related sanctions that saw Russia cut off from the Western financial system and its foreign reserves frozen. Additionally, Venezuela has also been the subject of sanctions by the US and the EU in recent years, further motivating the desire to switch to national currencies in trade.
Russian Foreign Minister Sergey Lavrov added that Moscow and Caracas are working to expand mutual trade and investment in order to make their economies more sustainable in the face of Western pressures and sanctions. The broader goal is to reduce dependency on the US dollar and build resilient economies that are less susceptible to external financial pressures and influence.
This move towards de-dollarization is part of a larger global trend where many countries are seeking to reduce their reliance on the US dollar in trade and financial transactions. The shift away from the US dollar comes as a response to geopolitical tensions, sanctions, and other financial pressures that have made countries seek more stable and sovereign financial systems.
Countries worldwide are exploring the possibility of conducting trade in their national currencies, as it would provide them with greater control and autonomy over their economies while reducing their vulnerability to external financial pressures. The use of national currencies in trade agreements can also reduce the impact of fluctuations in the value of the US dollar on the economies of these countries, providing more stability and predictability in their transactions.
The decision by Moscow and Caracas to transition to national currencies in their trade reflects a broader global trend that is reshaping the landscape of international trade and finance. This move may have significant implications for the future of the US dollar’s dominance in global trade and could lead to a more diverse and multipolar international financial system. As such, it represents a significant and strategic shift in global economic relations that could have far-reaching implications in the years to come.