During a meeting in Sochi on Monday, Turkish President Recep Tayyip Erdogan emphasized the importance of shifting to national currencies in bilateral trade with Russia. Erdogan’s statement came as he met with Russian President Vladimir Putin, and he expressed his belief that the meeting between the heads of their respective central banks was a significant step towards this transition.
In response, Putin acknowledged the positive progress in trade development between the two countries and highlighted the diversification of economic cooperation beyond traditional sectors like agriculture and energy. Erdogan expressed his satisfaction with the current volume of bilateral trade, which stands at $62 billion, and revealed their mutual goal of reaching $100 billion.
Despite their geopolitical differences, Russia and Turkey have been actively working on strengthening economic ties. In April, the two leaders agreed to promote mutual investments and facilitate the entry of Russian and Turkish businesses into each other’s markets. Last year, a roadmap for economic cooperation was signed, aiming to achieve an annual bilateral trade turnover of $100 billion. Additionally, both nations agreed to use the Russian ruble as a settlement currency in bilateral trade, including payments for Russian natural gas supplies.
The push for national currency use in bilateral trade reflects a desire to reduce reliance on the US dollar and increase economic autonomy. By using their own currencies for trade, both countries can mitigate the risks associated with fluctuations in foreign exchange rates and potential sanctions from the United States.
Furthermore, this move aligns with global trends, as several nations have sought to shift away from the dominance of the US dollar in international trade. China has been promoting the use of the yuan in international transactions, and Iran has recently announced plans to replace the US dollar with the euro in its official financial reporting. These efforts contribute to the overall trend of de-dollarization in international trade.
The deepening economic cooperation between Russia and Turkey not only benefits the two nations but also has wider implications for the region. As major regional powers, their collaboration sets an example for other countries and can pave the way for increased economic integration in areas such as the Middle East and Central Asia.
In conclusion, the meeting between Erdogan and Putin in Sochi emphasized the importance of transitioning to national currencies in bilateral trade between Russia and Turkey. The push for this transition reflects a broader global trend of de-dollarization in international trade. With a current trade volume of $62 billion and a goal of reaching $100 billion, both countries are actively working towards diversifying their economic cooperation. This deepened economic relationship not only benefits Russia and Turkey but also has wider implications for the region.
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