US 'abusing' dollar as reserve currency, Russia de-dollarizing and investing elsewhere - Lavrov

RT
Wed, 15 Jan 2020 07:24 UTC

While Washington is "abusing" the status of the dollar as the world reserve currency, Moscow will continue to reduce its dependence on the greenback in favor of national currencies, the Russian foreign minister says.

"Against the background of the increasingly aggressive use of financial sanctions by the US Administration, Russia continues its policy aimed at gradual de-dollarization of the economy," Sergey Lavrov told the Times of India. "Expanding settlements in national currencies is one of our priorities."

Russia has been developing mechanisms to mitigate the impact of US restrictions. New Delhi and Moscow are currently working on a new intergovernmental agreement on mutual protection of investments. Additionally, the Russia-led Eurasian Economic Union (EAEU) is mulling establishing a free trade zone with India, which is set to further boost investor protection, according to Russia's top diplomat.

Moscow has been steadily decreasing its US currency holdings. The Central Bank of Russia (CBR) halved the dollar share from its international reserves while increasing gold, yuan and euro holdings. According to recent data released by the regulator, the greenback share in Russian forex reserves was 24.2 percent as of June 2019, while the international reserves reached almost $550 billion as of the end of last year.

Comment: Lavrov called not just for peace but urged Gulf nations to actively cooperate to ensure regional stability:

Russian Foreign Minister Sergey Lavrov has urged Persian Gulf nations to work toward the creation of a joint security mechanism, noting that Moscow was concerned about the tense standoff in the region.

"We have been suggesting to the Gulf countries to think about collective security mechanisms, something like OSCE for Europe", Lavrov told the international Raisina Dialogue conference in New Delhi on Wednesday.

"It´s not just 'let´s not fight with each other'", Lavrov said, adding that the initiative is about transparency and cooperation, and suggesting that more international players should be involved.

He goes on to say that part of reason the G20 emerged is because the G7 failed to deal with issues of any significance and underrepresentation:

Developing nations, absent from the UN Security Council, enjoy greater representation in the G20 - and its emergence shows that the elitist Group of Seven is steadily losing significance, the Russian Foreign Minister suggested.

The Group of 20 - which includes the G7 countries as well as the five-member bloc of Brazil, Russia, India, China and South Africa (BRICS) - proved workable, especially when developing countries "have grievances regarding the lack of progress in reforming the Security Council," Sergey Lavrov told an audience during his trip to New Delhi.

"The creation of G20 was recognition that G7 can no longer decide any issue of any significance."

"I would say the deficiency - the main, and probably the only, deficiency of the Security Council - is underrepresentation of the developing countries," Lavrov acknowledged.

Russia has always backed the accession of two emerging economic giants - India and Brazil - to the council, he said.

"Our position is that the purpose of the reform is to make sure that the developing countries have a better treatment in the central organ of the United Nations."

Reader Comments

arcsmith · 2020-01-16T15:38:08Z

In terms of national debt to GDP output, it is the nations of the east that lead the way. The post WWII order has allowed western nations to live far beyond any realistic means for decades.

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arcsmith · 2020-01-16T23:20:38Z

The real state of the american economy.

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