Use of home currencies in EEU settlements grows by 10 p.p. up to 73% in 2013-2019 - EDB

<p> MINSK, Jan 28 - PrimePress. The use of national currencies in mutual settlements between the states of the Eurasian Economic Union (EEU - Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia) increased by 10 p.p. up to 73% in 2013-2019. </p> <p>   </p> <p> Chief economist of the Eurasian Development Bank (EDB) and the Eurasian Fund for Stabilization and Development (EFSD) Yevgeny Vinokurov made a statement to this effect on January 28, while presenting a report on the increased role of the EEU national currencies in international settlements. </p> <p>   </p> <p> “National currencies have the potential to grow: not all, but some of the remaining 27% can be converted into national currencies and added to the success of dedollarization. There are growth drivers for settlements in rubles and tenge in settlements with third countries and outside the EEU. Now every third transaction with Turkey and India is serviced in [Russian] rubles, less success in trade with China, but there is growth potential there too," said Vinokurov. </p> <p>   </p> <p> He added that in addition to the Russian ruble, the role of the Kazakh tenge, used in settlements with Russia and Kyrgyzstan, is growing. </p> <p>   </p> <p> “Further realisation of the potential of using home currencies can be achieved through a combination of two packages of measures: macroeconomic stability and monetary stability as the basis for exporters and importers to feel interested, find it comfortable and profitable to service their flows in national currencies. The second point: a package of government policies for the comfort of market participants,” said Vinogradov. </p> <p>   </p> <p> “The primacy in servicing mutual payments is with the Russian ruble - it accounted for more than 70% in 2015-2019. The high presence of the ruble in mutual trade is due to the high importance of the role of the Russian economy. Russia uses rubles to pay for a significant share of imports in trade with a number of countries. For example, in trade with Belarus the Russian ruble accounts for 80% of settlements, in the case of Kazakhstan and Kyrgyzstan the share of the ruble is around 60%. In general, the trade of EEU countries outside Russia remains dollar-denominated. The share of national currencies in servicing imports with third countries is 24%, the share of national currencies in servicing exports does not exceed 9%. The structure of payments has remained the same over the last seven years - market participants find it convenient to work with currencies that are conveniently convertible and invested in liquid assets”. </p> <p>   </p> <p> Dedollarization in foreign trade is taking place, but it is a slow process. </p> <p>   </p> <p> “The main constraint is the high share of the fuel and energy sector in countries’ total exports: payments for commodities are mostly made in dollars. The share of the dollar in servicing trade will decline as the share of the fuel and energy sector declines. The success of dedollarisation will be gradual and will depend on the level of export diversification. While fuel exports accounted for 22% of the EEU mutual trade in 2019, the level of diversification outside the EEU is lower". End </p>

2021-01-29

Primepress