Executive Intelligence Review


Putin Raised Transactions in National Currencies at the Vladivostok EEF Meeting

Sept. 15, 2018 (EIRNS)—After his keynote address to the plenary session of the Vladivostok Eastern Economic Forum on Sept. 12, Russian President Vladimir Putin took questions from moderator Sergei Brilev, who asked about “a serious matter, transactions in national currencies.” Putin’s response, posted to the Kremlin website, was quite carefully constructed, which began by changing the subject to infrastructure:

“Allow me to say a few words about infrastructure. It is a very important matter. First, we fully support President Xi Jinping’s idea regarding linking the infrastructure development ideas, the One Belt, One Road cooperation and our integration within the EAEU [Eurasian Economic Union]. Here we are also linking the China-proposed One Belt, One Road initiative and our EAEU efforts, this time in e-commerce. As concerns the infrastructure, it is just as important to us. I have already spoken about this many times and mentioned today the development of the Trans-Siberian Railway Network and the Baikal-Amur Mainline.”

Only then did Putin turn to the question posed:

“Settlement in national currencies. Of course, all experts understand that we must proceed step by step. And this is how we will proceed. Today the ruble and the yuan are traded at the Moscow Exchange. Some goods are more often traded in U.S. dollars.... For example, the ruble is being actively used to settle with the CIS [Commonwealth of Independent States] and EAEU countries.... Given the situation we have to face when settling in U.S. dollars, more and more countries want to trade in national currencies. There are limitations.... But developing bilateral trade in national currencies is also right. It is right from the position of sustainability of global finances and the global economy. We will proceed step by step.”

Brilev then pressed the issue:

“Does the Central Bank of Russia have a political task to sign agreements with the corresponding central banks in other countries to transfer trade to national currencies?”

To which Putin responded:

“This concerns the settlement day and the exchange rate: how this issue should be resolved, first at the level of central banks. These mechanisms are being tested. Are there risks? Yes, there are risks everywhere. Are there no risks with the U.S. dollars? The United States national debt is $20 trillion. This entire burden falls on the U.S. dollar, by the way. What will happen next? Nobody knows; there is no answer. There are risks everywhere and they must be minimized. What should we do to minimize them? We should diversify our payments and activities. For example, we diversify our foreign-exchange reserves, as we do the national debt of the Russian Federation, which is denominated not only in U.S. dollars but in other currencies as well. All this is important. I believe it provides for the sustainability of our financial system and the entire global financial system, as well.”