Apr 24, 2022
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The dollar and the euro are anxiously looking at the ruble, and even more at the yuan

The dollar and the euro are anxiously looking at the ruble, and even more at the yuan

Photo: imago stock&people/Global Look Press

In recent days, the President of the Russian Federation Vladimir Putin has repeatedly stated that Moscow intends to radically increase the share of payments in national currencies in foreign trade. And this applies not only to the commodity sector of the economy.

With which countries is it possible to switch to settlements in national currencies in the foreseeable future? When for what types, groups of goods?

— Russia’s desire to switch to settlements in rubles, in national currencies, is leading to the collapse of the system of international payments in dollars. The dollar system is collapsing, and, apparently, the way it should be, it is beneficial for us. How soon it will be, will it take place in hard or soft conditions – there are many options, – believes doctor of technical sciences, professor, expert in the field of space information systems and technologies (rocket-space and military-industrial complex), mechanical engineering, metalworking and foundry Vladimir Evseev:

– Expanding the range of countries (under the influence of the imposed very tough sanctions) with which we can trade in national currencies (it is necessary to agree on mutually beneficial conditions) will enable the ruble to enter the forefront of world trade. And our country will occupy a more important political, economic and financial position in the world trading system.

This is also dictated by the fact that the World Trade Organization (WTO) did not at all contribute to the normal international trade of our country, and only complicated our situation. And now, under pressure and even dictate from the United States, the WTO plays less and less the role of a regulator in international trade, where, in accordance with the rules of market trade, the freedom of movement of goods, services, currency, and personnel must be strictly recognized. etc.

All this was closed to us immediately and now it has become tougher to an incredible level. Well, why do we need all this? Therefore, of course, trade organized by the two countries for national currencies is great.

But, the next component of this organized process is trade within the framework of unions, organizations and associations within the framework of multilateral treaty agreements. For example, we have the Eurasian Economic Union, and I hope that no special problems are foreseen here. In the Shanghai Cooperation Organization, it is also realistic to reach an agreement in this regard. And there is the BRICS cooperation organization, in which all countries are heterogeneous, but it provides access to the African continent and Latin America. And this is already a swing to the world level of the exchange of national currencies in international trade.

Perhaps even within the framework of BRICS, there is a prospect of agreeing on the recognition (or establishment) of some single currency for such a union. There is a successful example from the Soviet period – the intergovernmental economic organization Council for Mutual Economic Assistance (CMEA). And now, look how widely we can cover the world community in international trade for national or some new, generally established currencies.

When it is attractive, promising and beneficial for all participants, then new participants will join such trade unions, which are now, in general, suffering from the dollar system, because, in fact, this is just a robbery of the United States in relation to other countries. . It is in these processes that the decisive role of our state and big business with the involvement of medium and small enterprises should actively affect. However, this process has not yet acquired a systemic and large-scale character.

“SP”: – But the economies of the countries that are members of the EAEU, SCO and BRICS, so to speak, are at different levels, their development is going in different directions …

— Yes, the development of countries in the above unions is uneven. In our EAEU, after all, there are former Soviet republics, and we are close in all respects and, most importantly, in terms of economic models. So, recently Belarus has finally decided to become our ally in all respects. This means that in order to develop this process, it is necessary to create uniform (similar, balanced) models of economic development in all EAEU countries, clearly coordinated in terms of the main indicators.

In the SCO and BRICS, the countries are completely diverse, with their own economic structures, with different levels of development of industry and technology, personnel and other things. This is where the processes of convergence of development models should be established, taking into account these features. And if other countries see that our mutually beneficial economic relations are being established in this vein, the benefits will become obvious, they will also be drawn into these unions, and then the dollar system will completely end.

“SP”: – In addition to raw materials, does our country have the opportunity to offer a wide range of goods and technologies for trade in national currencies?

— Today in Russia comes the age of technology. This is especially evident in the space and radio-electronic industries. With mechanical engineering, of course, we are not doing very well now, the situation is completely driven down. But the country has retained a great potential since Soviet times, and so far we have not exhausted the reserves in various industries that remained after the Soviet Union. Now this is what needs to be brought into the light of day, and begin to actively develop and implement at the modern technological level. Introduce IT technologies, convert to digital.

It is necessary to create hundreds of modern flexible automated productions, in which modern digital control methods harmoniously cover both technological processes and production organization processes (business processes). This will give us the opportunity to quickly close the gap in those industries that are in a neglected state. And, most importantly, it will make it possible to bring to the world market the widest range of technological products under the “made in Russia” brand.

This will help in the best way to strengthen the status of the ruble, if not as the main or reserve, then as the base currency for all-round mutually beneficial exchange on the world market. Well, let the collective West solve its problems with the dollar (euro) and internal socio-economic and political problems, and also continue dubious efforts to save the unipolar globalist world and attempts to save their national states under the influence of transnational corporations and structures of world capital.

– A significant limitation of the interest of countries in payments for rubles is the fact that the Russian ruble is not a reserve, and now (due to the imposed restrictions on the movement of capital) it is even a freely convertible currency, – noted Olga Belenkaya, Head of the Macroeconomic Analysis Department of FG Finam:

— At the same time, now for Russia, the departure from the main traditional currencies of foreign trade settlements – dollars and euros – has become a necessary measure in order to avoid blocking international payments by Western banks. Therefore, in cases where counterparties are interested in purchasing Russian goods (for example, because of an attractive price), they may agree to increase the share of national currencies in settlements, while pricing can still take place in the main reserve currencies – dollars or euros. Most likely, this will apply to commodity exports.

An increase in the share of settlements in rubles is likely, first of all, with those countries of the EAEU and the CIS, where it has so far remained low. Thus, Armenia announced the transition to payments for gas in rubles, although pricing will remain in dollars. According to the Central Bank of the Russian Federation, in the structure of exports from Russia to Armenia in 2021, the share of the ruble was 43.9%, to Kyrgyzstan – 48.1%, to Kazakhstan – 64.3%, while in general to the EAEU countries – 70.4%.

Among non-CIS countries, an increase in the share of settlements in national currencies with China, India, Turkey, and Latin American countries is likely. According to Bloomberg, several Chinese companies have started buying Russian oil and coal for yuan. However, this process is likely not to be simple and quick – according to the Economic Times, due to fluctuations in the ruble exchange rate and the unstable geopolitical situation, India will need time to complete work on a mechanism for trading in national currencies with Russia.

And so far there is no clear understanding whether European countries will accept the new procedure for paying for gas in rubles for “unfriendly countries”, which was introduced in Russia on April 1.

According to the Deputy Prime Minister of the Russian Federation A. Novaksome European countries have already agreed with this, however, he did not name them. Hungary and Slovakia have explicitly expressed their readiness to accept it, although the European Commission believes that paying for gas in rubles is a circumvention of sanctions.

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