Russia is transitioning to national currencies in its foreign trade due to Western sanctions but does not plan to abandon Western currencies completely, according to Andrey Kostin, the CEO of Russia’s second-largest bank VTB. In an interview with RBK news outlet, Kostin stated that Russia is not voluntarily giving up the use of the euro and dollar, and the country is still open to engaging in exports and imports with Western companies. He emphasized that it was the decision of Western countries to impose sanctions, not Russia’s.
Kostin pointed out that the shift towards trading in alternative currencies, such as the yuan, is a response to the difficulties that have arisen with dollar and euro settlements due to Western financial restrictions. He acknowledged that it is unlikely for a viable replacement for the dollar to emerge in the near future, but Russia is committed to establishing a legal international scheme for settlements in alternative currencies. The global community is showing increasing interest in payment schemes that are not tied to the dollar, as Washington often uses its currency as a political tool.
While Kostin expressed doubt that Western states would formally prohibit Russia from using the dollar and the euro, he believes it is not in their best interests to do so. He argued that a complete financial blockade would occur only if both the financial and manufacturing sectors were placed on the sanctions lists. However, he does not see this scenario happening. The European Union, for instance, is no longer considering new sanctions, indicating that they are leaving this window open because it is profitable for them. Western countries continue to purchase liquefied natural gas and oil products from Russia.
The CEO’s comments highlight the pragmatic approach of Russia in dealing with the challenges posed by Western sanctions. Russia aims to mitigate the impact of these restrictions by diversifying its trade and exploring alternative settlement mechanisms. While the complete abandonment of Western currencies may not be on the immediate horizon, Russia’s prioritization of national currencies in foreign trade reflects its desire for greater economic independence and resilience against external pressures.
In conclusion, Russia’s transition to national currencies in foreign trade is driven by the necessity to navigate Western sanctions. However, it does not signify a complete abandonment of Western currencies. Russia remains open to engaging with Western companies and sees the use of alternative currencies as a response to the difficulties arising from financial restrictions. The country aims to establish a legal international scheme for settlements in alternative currencies, recognizing the growing global interest in diversifying away from the dollar. While the formal prohibition of Western currencies by Western states is unlikely, Russia is taking pragmatic steps to ensure its economic independence and resilience.
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