From years of talking and thinking about how to reduce dependence on the main currency of the world, the US dollar and the state are moving to concrete actions. The other day, the head of VTB Andrei Kostin presented a plan to abandon the US monetary unit. Chairman of the European Commission Jean-Claude Juncker voiced his proposals to deprive the dollar of its current status. What governments are willing to take to get rid of dollar shackles, and where the “American” has already included a red light?
The head of VTB involves the re-registration of the largest Russian holdings in the domestic jurisdiction, the placement of Eurobonds on the Russian site, as well as the licensing of all participants in the stock market. The first and main point of the program is an accelerated transition in settlements with foreign countries for export-import transactions to other currencies. In this direction, certain steps have already been taken: since 2014, agreements have been in force with China on bilateral trade for rubles.According to the forecast of the Ministry of Economic Development, this year the trade between Moscow and Beijing will reach $ 100 billion, and the volume of settlements in national currencies will increase. In 2017, about ten percent of payments for deliveries from Russia to China were nominated in rubles, Russian companies paid for almost 15% of Chinese imports in yuan.
The next important step that Russia is ready to take is to abandon the dollar in the calculations for the main export commodity – oil. Analysts point out that the US currency can now be excluded from settlements with China, Turkey and Iran, which will only strengthen the trend towards dedollarization.Chinese yuan in the bank branch in Shanghai. The same way goes and China. In March, against the backdrop of the beginning of the trade war with the United States, Beijing dealt a powerful blow to the dollar in the global energy market, opening trade in oil futures in national currency. This proved to be a timely preventive measure. Now China is going to pay for the yuan and physical oil supplies. Analysts note: the rejection of the dollar is not only advisable in calculations for oil, but in general for all calculations. Russia, for example, may well start with the Eurasian Union. From the trade wars launched by Trump, hundreds of millions are also losing Europe. The head of the European Commission, Jean-Claude Juncker, speaking before the European Parliament, said about the need to deprive the dollar of the status of the main world currency.
The dismantling is supposed to begin again with petrodollars: Juncker complained that Europe pays 80% of energy imports in US currency. Absurd, he said, and the fact that European companies are buying European aircraft for dollars, not euros.A girl in a mask stylized as a hundred-dollar bill.
The consent of the counterparties to invest their currencies in the ruble, then to pay them for the supplied oil, would help strengthen the Russian currency. However, the main trouble is high risks of the ruble, volatile and unpredictable in profitability. To trade in other currencies, Russia’s desire alone is not enough, and the goodwill of the partner countries is required.”The transition, of course, is possible, but it will be necessary to give some discounts or preferences so that they at least cover the risks to the partners,” says Sergei Hestanov, Adviser to the General Director for Macroeconomics of the company, Otkryt Broker. Therefore, the calculations in euros are more realistic.On the other hand, some countries have already expressed a desire to switch to payments in the national currency. In particular, Turkey, which survived the collapse of the lira because of Washington’s sanctions. With its largest partners – China, Russia, Iran and Ukraine – Turkey is ready to trade in the national currency, the country’s president, Recep Tayyip Erdogan, said. As with the countries of Europe, if they wish, the Turkish leader adde
Nevertheless, it will not be possible to abandon the dollar completely. The world financial system is designed so that the “American” accounts for 70% of all calculations. “Russia trades in oil,
and she is nominated in dollars. Accordingly, in order to support import and export operations, a significant part of the reserves should be in US currency, “analyst Timur Nigmatullin said.” The independent economic expert Anton Shabanov considers the idea of a transition to mutual settlements in national currencies quite logical, but the plan proposed by the head of VTB “looks if not by utopia, then by the Wright brothers’ plane, Shabanov said on Sputnik radio.The point is that the world infrastructure is not enough to implement the plan. © RIA Novosti / Alexey AgaryshevPerey The World Bank, Washington, DC In any case, according to the World Bank, the dollar will lose its leading role in the world financial system, it will be replaced by a system of three currencies: the euro, the dollar and some Asian currency – most likely the yuan. The American economist and the former IMF adviser Barry Eichengreen explains the inevitability of losing the status of the main world currency by the dollar: the power of modern financial technologies destroys the “network effects” that created a natural monetary monopoly. This process he compares with the development of operating systems for personal electronics – it is no longer necessary to use only Windows. The rebellion against the dollar may be much stronger than most economists predict, warns Gal Laft, executive director of the Institute for Global Security Analysis. He recalled that the United States is now waging an economic war against two dozen countries with a total GDP of over 15 trillion dollars. The course is set by Russia and China, pulling more and more participants into the “anti-dollar block”. According to Laft, the main front, where the future of the dollar will be decided, will be the global market of raw materials – including the $ 1.7 trillion oil market.