The Russian President, Vladimir Putin has drafted a new law that will essentially eliminate the ability to trade with the US dollar and the euro, between CIS countries. This will create a single financial market between all CIS countries which are countries from the former Soviet Union.
A statement from Kremlin in part said; “At the current stage of integration in the CIS, it is essential to create a common financial market that would strengthen trade and economic cooperation between the Commonwealth member states.”
“The agreement contemplates direct access by the parties’ resident banks to each other’s domestic foreign exchange currency markets to conduct interbank FX transactions on terms more favourable than those offered to domestic commercial banks. This would help expand the use of national currencies in foreign trade payments and financial services and thus create preconditions for greater liquidity of domestic currency markets.”
“As a result, this would create the conditions whereby domestic currency markets would be developed to the maximum and it would become possible to carry out a coordinated currency policy that would aim to create extra opportunities for implementing long-term trade and economic investment cooperation strategies and achieve macro-economic stability in the region.”
China has also been trying to change the dollar’s dominance as well, with its central bank putting the Russian ruble into circulation, replacing the US dollar in Suifenhe City, Heilongjiang Province. It was only this year when the People’s Bank of China and the Russian Central Bank signed a currency swap agreement for three years. This is said to be worth approximately $24.5 billion or around 150 billion yuan.