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Business/Finance See other Business/Finance Articles Title: Russia to switch to ruble settlements with Europe? Pravda... In response to economic sanctions of the West, Russia intends to switch to rubles in its deals with European partners instead of dollars and euros. State-owned export companies are said to be the first on the line to do it. The head of the state-owned VTB Bank, Andrei Kostin, voiced the idea on the eve of the Congress of the Association of Russian banks in Moscow. He believes that one should launch the process to switch to foreign settlements in rubles immediately. This is a primary task for the banking system, the Central Bank and the government of the Russian Federation, he said. According to him, in this case Russia will be able to "reduce dependence on the vagaries of the US and EU authorities" that continue to threaten Russia with sanctions. "It has been a month already when senior Western executives call to isolate Russia, by virtually destroying the Russian banking sector with the use of modern "nuclear weapon" in finance - dollar settlements," said Kostin. Coincidentally, officials with the Russian Foreign Ministry said that U.S. bank JPMorgan Chase blocked a dollar transaction from the Russian Embassy in Astana to insurance company Sogas. The transfer was blocked " under the pretext of anti-Russian sanctions." It may seem at first sight, that this idea is far from being real. To be able to pay rubles for Russian exports, Europe will have to obtain rubles somewhere at first. In addition, the Russian ruble should become a more convertible currency than it is now. The Russian authorities will have to take efforts to improve the reputation of the national currency as a sustainable means of payment. Ruble settlements will become advantageous to Russian banks in the first place, because European partners will have to seek assistance with Russian banks in the first place, unless, of course, they change their mind and decide to refuse from Russian products. Technically, the move to switch to export and other types of settlements in rubles may lead to positive consequences for the Russian financial sector. Negative consequences are also possible, though. As long as the ruble is not a currency of international settlements , not to mention the fact that it is too agile, like any other commodity currency, exporters will not be able to predict financial flows accurately. To crown it all, Russian companies will lose their foreign currency earnings. They will not be able to attract loans from Western banks and issue bonds on foreign markets. A large part of exports goes through subsidiary trading structures of Russian companies, and these structures are registered in Europe. In turn, Western partners of Russian companies will be forced to either form ruble reserves, which is unlikely, or buy rubles for euros or U.S. dollars on spot market from commercial banks or the Russian Central Bank. As long as commercial banks will lose a large part of foreign currency accounts of state-owned companies, the only significant member in the foreign exchange market will be the Central Bank. In this case, Russian exports will be fully nationalized. Poster Comment: Makes good sense. Europeans create jobs, earn rubles by providing Russians with goods, services, machines; pay for gas with rubles. Each avoids Bernanke dollar which likely to collapse when the music stops. Post Comment Private Reply Ignore Thread Top • Page Up • Full Thread • Page Down • Bottom/Latest Begin Trace Mode for Comment # 3.
#1. To: Tatarewicz (#0)
The transfer from one fiat system to another doesn't cure the international banker problem though it might cause the collapse of the U.S. Fiat Dollar. Ultimately the "middle-men" must be cut (murdering scumbag bankers) out and individual government currencies made to stand upon their own worth as that relates to the country's production of goods that other nations are willing to purchase in the producing nations currency. Nations incapable of producing anything will remain as 3rd world dependents. Those producing nations will see much higher standards of living without the bankers taking a cut of everything that takes place within a nation. The bankers have been allotted a monopoly scheme that's bankrupting the world. Fuck em.
Extremely well stated.
#4. To: Rotara (#3)
Thank you my extremist friend.
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