The Russian ruble could be a way for BRICS countries to make reciprocal trade payments, because the macroeconomic situation in Russia is “characterized by stability”, and the national currency can be converted easily to any other global currency, said Russian President Vladimir Putin at a BRICS summit in Brazil on Thursday.
He believes that national currencies should be actively used to finance projects, instead of traditional reserves.
“This will help to increase the weight of association member-states’ currencies in international payments, and also to avoid additional risks and expenses,” RIA Novosti cites the Russian president as saying. “I would like to remind you that the Russian national currency, the ruble, is completely and freely convertible to any global currency. I’m referring to the stable macroeconomic situation in our country, the ruble could be an additional means of payment between our countries, and fully meets all these requirements,” Putin emphasized. The stability of the Russian economy, he claims, is the result of “a balanced macroeconomic policy” which has been pursued by the Russian government for “many years”.
“We have been treating state finances responsibly, supporting the stability of the banking and credit markets. We are striving to help strengthen the key sectors of the economy,” he said, adding that in this way the government has managed to “keep the country’s economy from slipping into a recession”.
Another option for breaking ties to the dollar in reciprocal payments between BRICS countries could be a single cryptocurrency, observed Kirill Dmitriev, CEO of the Russian Direct Investment Fund (RDIF) and a member of the BRICS Business Council.
The creation of such a system is “being actively discussed at the moment”, he said. “The RDIF, as chair of the BRICS Business Council’s work group for financial services, has discussed the matter of creating a BRICS payment system. The support of Business Council members has been received in this matter,” he added.
He noted that countries in the bloc have already been reducing the proportion of US dollars used in payments. “In Russia over five years the dollar’s proportion in foreign trade payments has decreased from 92% to 50%, and the ruble’s has grown from 3% to 14%,” Dmitriev said.
According to the Bank of Russia, in the first half of 2019, the US dollar accounted for 66.4% of the payments to Russia for its exports, and the greenback was used in only 36% of Russia’s imports.