Russia Announces Plans to Reduce Dependence on U.S. Dollar

Following the latest round of U.S. sanctions, Russia announced plans to reduce its dependence on U.S. dollar and payment systems.

“We will, of course, speed up the work on import substitution, reduce dependence on US payment systems, on the dollar as a settling currency and so on. It is becoming a vitally important need”, Russian Deputy Foreign Minister Sergey Ryabkov said on Monday.

“The US is using its dominating role in the monetary and financial system to impose pressure on foreign business, including Russian companies,” he stated.

As a result of U.S. sanctions in 2014, MasterCard international payment system stopped serving clients of seven Russian banks, which prompted Russia to create its own national paying system, and introduced the Mir charge card in 2015.

The latest U.S. sanctions adopted by overwhelming majority in both houses of Congress, imposed new restrictions on Russian backing, as well as the vital energy sector. The sanctions also target Russian firms.

Individuals who invest more than $5 million a year or $1 million at a time in Russian energy export pipeline projects, could be punished under the provisions of the sanctions law. At the same time, new sanctions against Russia caused concern in the EU that the new penalties may affect European energy security and hurt European firms and business.

Russia has already made attempts to find an alternative for U.S. payment systems and its dependence on U.S dollar. After the breakdown of U.S.-Russia relations following the Ukraine crisis, Russian President Vladimir Putin spoke of the possibility of dumping the dollar.

Source: Reuters