Paintings by Chagall, Russian 16th century icons to be on display at art fair in BrusselsSociety & Culture January 16, 21:50
Russia calls to probe into attack on Moscow Patriarchate’s church in Kiev — diplomatRussian Politics & Diplomacy January 16, 21:25
Russia, US start restoring business ties — ombudsmanBusiness & Economy January 16, 21:21
Figure skating pairs competition excluded from schedule of 2017 Winter UniversiadeSport January 16, 20:34
DPR top diplomat blames Kiev for dodging discussion of Steinmeier formula implementationWorld January 16, 20:14
IMF maintains forecast for global economy growth in 2017 at 3.4%Business & Economy January 16, 19:45
Six more settlements join Syria ceasefire regime — Defense MinistryWorld January 16, 19:22
Foreign Ministry: Washington initiating new arms race in EuropeRussian Politics & Diplomacy January 16, 19:15
Diplomat says anti-terror efforts must not be hostage to political ambitionsRussian Politics & Diplomacy January 16, 19:08
This content is available for viewing on PCs and tabletsGo to main page
The Russian ruble will be included in the list of foreign currencies traded on Serbia’s internal market, which will automatically pave the way for settlements in the Russian currency. Moscow has long cherished the hope for turning the ruble into a world reserve currency. Analysts say it is too early to speculate about this. At this point the ruble has good chances of becoming a universal currency within the Common Economic Space of Russia, Belarus and Kazakhstan.
Pretty soon the Russian ruble will be on sale in any commercial bank and at any exchange desk in Serbian territory, as follows from a decision by the executive committee of the Serbian National Bank. The financiers have taken into account the growing foreign trade transactions between the two countries, the influx of investments by major Russian companies into Serbia and the existence of bilateral duty-free trade.
At the moment the Russian ruble and the currencies of the other CIS countries and Central and Eastern Europe belong to the group of internal currencies. This means that they are mostly in demand on the domestic markets. Although such currencies can be partially or completely convertible, they are not used in international transactions.
The transfer of settlements to national currencies will help expand trade, because transaction costs go down. Besides, the national currencies gain greater stability and their dependence on the dollar is eased. As currency market analyst Anna Bodrova, of the Investcafe agency, has told the daily Novyie Izvestia, Serbia’s step is mostly diplomatic and one should not hope the ruble has near-term prospects.
“The opportunity to perform settlements in the Russian currency creates more beneficial conditions for Russian companies doing business with Serbia,” expert explained. “For exporters it is more convenient to make and accept payments in the currency that they use to take revenues home. And still the economy of the country is not as large as that of China, with which Russia has an agreement on settlements in the national currency.
Alina Komkova believes that Serbia’s initiative may help the Russian authorities implement their ambitious plans.
“The Russian government has identified long-term objectives for developing the financial system of the country, including the development of the national currency,” Komkova said. “This means accessing the inter-regional level, and in the long term, the international one. The Russian ruble is already used in direct trade transactions by the countries of the CIS, Central Asia and China. Serbia is a new step in that direction, this time towards Europe.”
Russia has similar relations with the Customs Union countries, the analyst said. In principle, the ruble, in her opinion, has chances of becoming a reserve currency within the framework of that union in five years to come.
The president of the VTB bank, Andrei Kostin, said earlier that the Russian ruble had a good chance of becoming a regional currency, a currency for concluding transactions in the post-Soviet space. “The world is entering a system of multi-polar control of financial markets. In the near future the dollar will lose its position as a currency for international transactions. The role of China and other booming economies has been growing, so the significance of other currencies will be soaring, too,” Kostin said at the APEC Business summit.
However, the authorities have far more ambitious plans for converting the ruble into a world reserve currency. Prime Minister Dmitry Medvedev told the international investment forum of the CIS countries at the end of September the ruble had every chance for achieving that status. In his opinion, the existing world currency system based on the domination of the US dollar has proved its instability. He added that Russia was advancing this project not on its own, but with partners in the Common Economic Space.
In the meantime analysts believe that it is too early to speculate about that.
“The talk about the status of the ruble is ambitious. For the authorities it is important to keep discussing the theme, but in reality it will take the ruble 20-25 years to get closer to the desirable status,” Anna Bodrova said. “The raw materials export-based model of the Russian economy is the root cause. Russia is still unable to offer to the world anything but raw materials. Speculating about the ruble as a reserve currency currently makes no sense.”
“In reality the US dollar is alive and kicking as before. It enjoys credibility with the investors, who continue to regard it as a safe haven. The trade turnover that the dollar keeps going is tremendous,” says the director of the analysis department at Alpari company, Alexander Razuvayev in an article in the on-line daily Vzglyad. “However, this is no hindrance to Russia in addressing Eurasian issues. Last summer Prime Minister Dmitry Medvedev called for giving thought to introducing a common currency in the territory of the Eurasian Economic Union, which is to be created by January 1, 2015. But, the way the Russian Prime Minister sees it, this may happen much earlier.”
Straight transition to settlements in the Russian ruble in Belarus and Kazakhstan is not on the agenda, though, he said. Apparently, the national currencies will be replaced by a Eurasian Central Bank and a new Eurasian currency.
MOSCOW, October 11