Russia’s move away from dollar ‘irreversible’ – leading banker

Andrei Kostin says the country’s foreign trade has shifted to settlement in national currencies

Russia is moving away from using the US dollar and euro in foreign trade, a process that is “irreversible,” claimed Andrei Kostin, the head of VTB Bank, one of Russia’s largest lenders.

“Quitting the US dollar and euro is already an irreversible process for Russia. Taking into account the current trend, our main foreign trade partners in the medium term will be China, the EAEU countries, Turkey, India, Middle East, Latin America, and Africa. Switching to national currencies in trade with this particular group of countries is the top priority for us,” Kostin said at the Eurasian Economic Forum in Baku on Thursday.

Moreover, according to the banker, the decision made by the US and other Western nations to freeze Russia’s foreign exchange reserves earlier this year shows that no country is safe from such treatment, a state of affairs that will likely turn other nations away from the major reserve currencies.

“No state can feel fully protected in the conditions of a dollar-centric global economy,” Kostin stressed.

His words echoed statements made last month by President Vladimir Putin. In mid-September, while discussing measures for restructuring the country's economy under Western sanctions, the Russian president called de-dollarization “an inevitable process.”

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Russia approved a plan for the de-dollarization of the domestic economy back in 2018. A package of measures was introduced aimed at speeding up the process, with the goal of implementing the steps within six years. However, following the unprecedented economic sanctions imposed on Russia in the wake of its military operation in Ukraine, Moscow accelerated the process of moving away from what it calls the “compromised” dollar and euro. A ruble-based payment scheme for gas exports was implemented and national currencies started being used in settling Russia’s foreign trade with its trading partners.

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