Beware the Ides of March

Introduction
It seems we are in a time of dramatic change, a time when the dollar may slip from it's current status of sole global reserve currency.

First, other trading currencies (yuan, ruble, rupee, for example) may rise alongside the dollar.

Second, perhaps a 'euro-like' trading currency may arise in Eurasia (and beyond), a trading currency pegged or valued against 'baskets' of other major currencies and - importantly - commodities. Commodities might include oil, gas, minerals, agricultural products, perhaps even renewable energy export capacity. Central bank gold (and silver) reserves in these countries may once again play a part as a stabiliser of the value of paper money.

A third track may be government issued digital trading currencies, perhaps backed by gold. (Whether intermediated by commercial banks or not).

Part of the driver for these changes is the extreme indebtedness of the USA, with the prospect of the interest on its debts being unpayable if more large tranches of money are printed. Government debt is used to fund social welfare, military costs, interest on previous government debt, and so on. (On December 16 2021 the US Government debt ceiling was raised by $2.5 trillion to just over $31 trillion.) If the debt ceiling is not raised the Government is at risk of default.

The United States Government is aware of this, and is taking measures to devalue the dollar to make debt cheaper to pay back, and at the same time increase it's own GDP by crippling its Eurasian competitors in the global market for goods and services.

The US and Europe Introduce almost complete trade restrictions on Russia - a war of aggression

Taken together, these economic sanctions are a new kind of economic statecraft with the power to inflict damage that rivals military might."
US President Joe Biden, 26 March 2022

"As a result of these unprecedented sanctions, the ruble almost is immediately reduced to rubble. The Russian economy — that’s true, by the way. It takes about 200 rubles to equal one dollar. 
The economy is on track to be cut in half in the coming years...Russia’s economy was ranked the 11th biggest economy in the world before this invasion. It will soon not even rank among the top 20 in the world."

US President Joe Biden, 26 March 2022

"For God’s sake, this man cannot remain in power."
US President Joe Biden, 26 March 2022

"The government says it wants to reduce the number of SOEs. Economy Minister Yuliya Svyrydenko announced the government’s intention to reduce the number of ministry-managed SOEs to no more than 100 in 2022. [There are about 3,500 registered state-owned entities having a variety of legal forms. 40% of these entities are deadhead and only exist on paper. Every third enterprise is unprofitable being a potential source of fiscal risks. The lack of adequate control mechanisms and low transparency make state enterprise activities a source of corruption risk ]

According to Svyrydenko, the largest SOEs will be overseen by the Cabinet of Ministers. Svyrydenko also said that state companies will be triaged into operating and non-operating. The operating enterprises will be further triaged into companies that will be privatized and ones that will stay in state hands.

Non-operating SOEs will be liquidated or privatized depending on their condition.

Also, on Jan. 13, Prime Minister Denys Shmyhal instructed the Ministry of Economy, together with responsible agencies, to prepare a list of state property to be transferred for privatization and create a roadmap for 2022 on the corporatization of SOEs.

No information is available on when the triage of SOEs and the corporatization roadmap are to be completed."
- https://kyivindependent.com/opinion/ukrainian-state-owned-enterprises-weekly-issue-60/

"Ukraine’s agricultural land is currently under a moratorium that bans its sale until January 1, 2016. Despite this moratorium, at least 1.6 million ha of Ukrainian agricultural land is currently in foreign hands.According to several reports, just 10 large agribusinesses control as much as 2.8 million ha....In 2001, Ukraine passed its Land Code – legislation that gave people functional titles to land....A document prepared by the legal firm Frishberg & Partners details various ways to circumvent Ukraine’s moratorium.16

The firm notes that investors can typically lease farmland for up to 49 years at a time, saving “millions of dollars in cash” that would otherwise be required to purchase the land directly. The firm goes on to explain that the moratorium on land sales applies only to agricultural land, making it both legal and affordable for investors to “build and operate a 100% foreign-owned processing facility on its own industrial land while leasing fields from agricultural landowners until the moratorium on the sale on agricultural land is lifted.”

As a result, they suggest that the moratorium “should not serve as a deterrent to taking advantage of Ukraine’s black, fertile soil.”

A second way that investors can circumvent the land moratorium is by buying shares of large existing Ukrainian agribusinesses."
Oakland Institute December 2014



"According to Frédéric Mousseau, director of the Oakland Institute, the “geoeconomic” dispute over Ukraine represents the biggest clash between the two rival blocs since the Cold War. With the events of Maidan in 2014, the Western camp prevailed, while Putin retaliated by taking Crimea and waging war in the Donbass. The developments marked the beginning of Ukraine’s “annexation” into the Euro-Atlantic economic sphere, described by Mousseau and Elisabeth Fraser in a 2014 report entitled The Corporate Takeover of Ukrainian Agriculture, which gives an account of the redoubled push by Western financial institutions to “throw open the nation’s vast agricultural sector to foreign corporations.”

From the West came arms and money in the form of assistance packages from the World Bank, the International Monetary Fund and the European Bank for Reconstruction and Development. As usual, the cash was strongly tied to reforms that Ukraine was required to implement, all under the banner of fiscal restraint and austerity. Also according to Mousseau, the drive in Ukraine to privatize the land market is unprecedented in recent history.

To limit unrestrained privatization, a moratorium on the sale of land to foreigners had been imposed in 2001. Since then, the repeal of this rule has been a main goal of Western institutions. As early as 2013, for instance, the World Bank provided an $89 million loan for the development of a deed and land title program needed for the commercialization of state-owned and cooperative land.

Furthermore, Western banks are imposing the optimization and consolidation of agribusinesses into large entities at the expense of small producers, who still constitute the majority in the country, with the goal of increasing “added value,” and, in the words of a 2019 World Bank paper, “accelerating private investment in agriculture.” The same report states that “a 30-percent productivity increase in agriculture could result in an additional 4.4 percent Ukrainian GDP growth in five years, and 12.5 percent growth over ten years.” It is safe to assume that the growth rates of private agricultural producers were expected to see far greater increases

Today, some estimates speak of 3.4 million hectares in the hands of foreign companies and Ukrainian companies with foreign funds as shareholders. Other estimates are as high as 6 million hectares. The moratorium on sales, which the US State Department, IMF and World Bank had repeatedly called to be removed, was finally repealed by the Zelensky government in 2020, ahead of a final referendum on the issue scheduled for 2024."
Luca Celada, ilmanifesto 3 June 2022

The US Trap - the excuse for massive 'sanctions' on a nuclear superpower

"I remember very well President Petr Poroshenko at these talks.

He has said recently that no one ever thought of implementing the Minsk agreements in Ukraine.

This was a manoeuvre undertaken with for the sole purpose of winning some time in order to rearm the military to take their revenge. He said so in public and did not even blush."
Sergey Lavrov 30 June 2022

"What if we recognise them and make them part of the Russian state at their request...but the shelling and military operations planned by the Kiev regime continue and are inevitable? They [Kiev] have held two large-scale military operations; it is true that they did not succeed, but they were held. The shelling would certainly have continued. What could we do? Launch an operation. Why wait for them to be the first to do it? We knew that they were preparing to do it. Of course, this is the inevitable logic of events.

We always saw what was happening there.

For eight years, they have been creating a fortified area that cut deep enough into Donbass, and of course, venturing there and suffering losses was pointless – this is the first point.

Secondly, we were well aware that this process would continue, and it would be getting worse, more difficult, more dangerous for us, and we would suffer even more losses. Those are the considerations we were guided by. NATO’s development in that territory was in full swing – and it keeps on going, just like it was going on then. Those fortified areas would have spread far beyond today’s contact line in Donbass – they would have been everywhere. That’s all there is to it.

...if fortified areas had continued to be built there for several more years, throughout the country, with personnel being trained and weapons systems accumulating there (weapons they never had, weapons many still do not have even now), the situation would have been completely different for Russia, even in terms of conducting this special military operation."
Vladimir Putin 27 October 2022

“I must say this very clearly: The sanctions we have imposed so far don’t work. The best evidence is the ruble exchange rate”
 - Polish PM Mateusz Morawiecki April 2022

"They expected sanctions to rapidly produce a devastating effect on Russia’s finances and economy, sow panic in the markets, bring about a collapse in the banking system and create major shortages of goods in shops.

However, we can already say in all confidence that this policy has failed in Russia. The strategy of unleashing an economic blitzkrieg has been ineffective."
Vladimir Putin, April 18 2022

"...we have failed for the past eight years to build the positions of long-term strength essential to successful negotiation. It was doomed because we were unprepared with new policies or new programs for the settlement of outstanding substantive issues. .. that by a miracle of personal charm and public relations the Russians could be cajoled into yielding some of their hard-won positions of strength - that we had some conception of alternative settlements that were both acceptable to us and possibly acceptable to the Soviets...For words and discussion are not a substitute for strength - they are an instrument for the translation of strength into survival and peace.."
John F Kennedy 14 June 1960

"Attempts to engage in a dialogue with us from the position of strength are doomed to failure from the start: we will retaliate strongly and resolutely against any unfriendly moves."
Sergey Lavrov, 6 July 2021

"It costs only a few cents for the Bureau of Engraving and Printing to produce a $100 bill, but other countries had to pony up $100 of actual goods in order to obtain one"
- Barry Eichengreen (American economist)

The dollar is no longer backed by gold

"The third indispensable element in building the new prosperity is closely related to creating new jobs and halting inflation. We must protect the position of the American dollar as a pillar of monetary stability around the world."

"Washington has consistently demonstrated its inability to be an impartial guarantor of the global financial system and is increasingly abusing its position. It needs to be recalled that, after the approval of the gold-dollar standard in 1944, the United States increased its balance of payments and trade deficit so much that it led to something known as “Nixon shock” and the eventual collapse of the entire Bretton Woods monetary system by 1971.

 It was replaced by the Jamaican currency system, based on the free convertibility of currencies without reference to gold. However, as it turned out later, all it did was expand the circle of states that could afford to live on credit.

Only countries that issue key reserve currencies have the privilege of increasing borrowing and then depreciating it, while the rest of the world is left to live with whatever it has. This is the modern embodiment of the imperial model involving prosperity of the core at the expense of periphery."
Ministry of Foreign Affairs of the Russian Federation, 23 March 2023

"...the leading economies have shown a tendency to use their “printing press” every time they needed to make up for the rapidly growing budget deficits and artificially support the population’s living standards. Over the past two years alone, the total money supply in the United States has grown by almost 40%, and in the European Union, by about 20%.

Obviously, the monetary authorities in the United States and the eurozone made such decisions without much regard for what this would imply for the rest of the world, countries that kept a significant share of their savings and attracted funding in dollars and euros.

...A significant part of the money injected into the economy was immediately invested outside the issuers’ markets. Western companies started excessive buying of goods, services and assets around the world, which spurred global inflationary processes; that, in turn, exacerbated the poorest countries’ difficulties...The widespread rise in prices, and the food and energy crises of recent years are the result of ill-conceived decisions and flagrant monetary and economic policy blunders by the countries that constitute the collective West..."
Ministry of Foreign Affairs of the Russian Federation, 23 March 2023

Assets are now the pillar of stable purchasing power in the post - Bretton Woods world

"The seizure of Russian gold and currency reserves in the United States and Europe have led the international community to realise that no one is immune from expropriation of tangible assets that are kept in Western jurisdictions. Not just Russia, but a number of other countries are consistently reducing their dependence on the US dollar and transitioning to alternative payment systems and payments in national currencies."
Sergey Lavrov 11 July 2023


"Many countries are wondering if it is wise to use US dollars in mutual trade so widely. Saudi Arabia agreed on using the yuan. This process cannot be stopped. President Putin has said on numerous occasions that by addressing their short-term, even if politically important, considerations in this way, the Americans are harming their own cause in the long term. The role of the US dollar will decrease. Trust in it is already falling dramatically."
16 March 2022 22:54
Foreign Minister Sergey Lavrov’s interview with RBC TV channel, Moscow, March 16, 2022


"The manipulation involving paper dollars, on which the global economy is based, will come to an end, and more reliable instruments will appear to ensure the proper functioning of the financial and other systems."
Sergey Lavrov 8 September 2023


 “Just today, Brazil, the largest country in the Western Hemisphere, cut a trade deal with China. They’re going to, from now on, do trade in their own currencies, get right around the dollar. They’re creating a secondary economy in the world totally independent of the United States.

We won’t have to talk about sanctions in five years, because there’ll be so many countries transacting in currencies other than the dollar that we won’t have the ability to sanction them.”
US Senator Marco Rubio April 2023


"...the 12,000 sanctions that the collective West put on Russia broke the system. Other states looked at those sanctions and they thought 'we have
to defend ourselves. We have to defend our wealth from freezing, seizure, expropriation', and the way to do that is to move away from the dollar; and the key moment was in December of last year when President X stood with the six heads of state of the gulf cooperation Council and invited them to trade oil in Shanghai for Yuan ending 50 years of the Petrodollar"
Kathleen Tyson, Currency and Global Clearerance System Expert, speaking on 'Multicurrency Mercantilism' at The Network State Conference, 3 November 2023

"However, Western anti-Russian sanctions also contribute to the yuan’s appeal, analysts say. Due to sanctions, bank clients are seen gradually switching from currencies of “unfriendly” countries, primarily the US dollar and the euro. Nikita Silkin, head of the online broker BCS Global Markets, told newspaper Kommersant that the trend is obvious, both among individuals and legal entities, with importers forced to switch to conducting transactions in currencies that are not influenced by sanctions."
RT 24 July 2022

" ...the United States made a huge mistake by using the dollar as a weapon in fighting for its political interests. This undermines trust in the dollar and other reserve currencies. The loss of trust is big – believe me, I know what I am talking about. Now everyone is thinking whether it makes sense to keep foreign currency reserves in dollars.

It is not so simple to part with the dollar because the Americans have created a very powerful system that keeps these reserves and actually does not let them out. It is very difficult to get out but everyone has started pondering over the future"
Vladimir Putin 27 October 2022


"...But new trade patterns may have ramifications for payments and international currency reserves.

In recent decades China has already increased over 130-fold its bilateral trade in goods with emerging markets and developing economies, with the country also becoming the world’s top exporter. And recent research indicates there is a significant correlation between a country’s trade with China and its holdings of CNY as reserves.

New trade patterns may also lead to new alliances. One study finds that alliances can increase the share of a currency in the partner’s reserve holdings by roughly 30 percentage points. All this could create an opportunity for certain countries seeking to reduce their dependency on Western payment systems and currency frameworks…

Anecdotal evidence… suggests that some countries intend to increase their use of alternatives to major traditional currencies for invoicing international trade, such as CNY or INR.

We are also seeing increased accumulation of gold as an alternative reserve asset, possibly driven by countries with closer geopolitical ties to China and Russia.

There are also attempts to create alternatives to SWIFT… These developments do not point to any imminent loss of dominance for the USD or EUR… But they do suggest that international currency status should no longer be taken for granted.
Christine Lagarde, ECB President, 18 April 2023


"As concerns the United States, one of the US Administration’s colossal mistakes is that they prohibit using the US dollar in international transactions, making it a weapon of some sort. This is complete nonsense as they undermine confidence in the US dollar. It is simply ridiculous. Ridiculous. Grit your teeth and do whatever it takes to preserve the dollar, to boost its significance and authority.

They are killing it with their own hands.

As a result, we have been prompted to shift to transactions in national currencies, for one. It turned out that this step did not cause any issues when it comes to developing our relations; on the contrary, this move has been helping us strengthen our national currencies.
Vladimir Putin 5 June 2024

"Russia considers the creation of new international financial platforms inevitable; this includes international transactions. These platforms should be above national jurisdictions. They should be secure, depoliticized and automated and should not depend on any single control centre. Is it possible to do this or not? Of course it is possible. This will require a lot of effort. Many countries will have to pool their efforts, but it is possible.

This rules out the possibility of abuse in a new global financial infrastructure. It would make it possible to conduct effective, beneficial and secure international transactions without the dollar or any of the so-called reserve currencies. This is all the more important, now that the dollar is being used as a weapon; the United States, and the West in general, have discredited the institution of international financial reserves. First, they devalued it with inflation in the dollar and euro zones and then they took our gold-and-currency reserves.

The transition to transactions in national currencies will quickly gain momentum. This is inevitable. Of course, it depends on the status of the issuers of these currencies and the state of their economies, but they will be growing stronger, and these transactions are bound to gradually prevail over the others. Such is the logic of a sovereign economic and financial policy in a multipolar world."
Vladimir Putin 27 October 2022

"...non-resident banks from EAEU countries, as well as banks from Tajikistan now have direct access to the Russian forex market, and the non-residents operating on this market consist of 21 credit institutions.

The bill will give the Russian government the right to approve a list of jurisdictions, the credit institutions and brokers of which will be given access to organized forex trading in Russia.

"The bill also allows for the possibility of giving foreign credit institutions and brokers from friendly countries access to trading of derivatives, the underlying assets of which are forex and interest rates, which will enable trading participants to hedge forex and interest risks," the memo said.

The bill stipulates that ...foreign financial ...institutions will only be able to conduct transactions with the central counterparty. The Central Bank of Russia will set requirements for foreign banks and brokers who might be given access to organized forex and derivatives trading. "In addition, in order to ensure the stable operation of the financial market, it is proposed that the Bank of Russia be given the right to set restrictions on transactions conducted by foreign organizations on the forex and derivatives markets," materials attached to the bill said."
Interfax 22 December 2022

"We will see how this tool will work. But this is the result of the joint efforts of the Government, the Presidential Executive Office, and the Central Bank. The order I signed is the result of joint work.

There are different approaches to solving this problem. The problem is here; it happened due to a certain imbalance in cash flows, primarily, currency-related flows. At the initial stage, we de-bureaucratised everything as much as possible...after the beginning of the special military operation.

However, our economic operators quickly coped with all the problems created for them from abroad. And now there is reason to believe that the ruble exchange rate is fluctuating, among other things, because foreign exchange earnings are not being returned in sufficient quantities to use this money supply in the domestic market.

I do not know how effective this will be...there are different approaches: the Central Bank has its own views, the Government its own, and the Executive Office has slightly different ones. But the signed executive order is the result of a compromise among specialists and experts. And, of course, there is logic in the decisions made.

We also understand the possible threats associated with the movement of capital. Therefore, nothing lasts forever, so we will see how it works and how the institution of Rosfinmonitoring’s special commissioners will work.

By the way, please note that they are appointed not to regulate or manage anything, but only for one purpose: to have reliable and complete information about these cash flows; that’s all, so that the state is aware of what is going on.

However, if all our services have achieved a certain compromise, as set forth in this executive order, then they all think that it must have a positive impact.

...we need the [dollar] exchange rate to be a little bit lower for budget purposes. Had everything been satisfactory, there would have been no Executive Order.

I will say something that may be important: the ruble-to-dollar exchange rate cannot be ascribed to some economic problems. Nothing of the sort. We have economic stability, and the macroeconomic indicators are good and can be easily forecast for the next six to 12 months.

It is simply an issue of currency exchange controls. We have completely dismantled it but in the current situation, to all appearances, our exporters prefer to leave a considerable part of export earnings abroad. That is the thing....Imports have increased and the desire to keep the earnings abroad has grown stronger."

Vladimir Putin 13 October 2023 

"In order to mitigate sanctions risks to trade and economic cooperation between Russia and Latin America, we are consistently working to introduce alternative financial mechanisms to Western ones, and that includes non-cash payment..."
Foreign Ministry Spokeswoman Maria Zakharov, June 8, 2022.

"We see that the dominance of the dollar is disappearing, settlements in national currencies appear, and, ultimately, the paradigm is changing. And if we recall the classic ‘money-commodity-money-price' scheme - this is the Bretton Woods paradigm, then now a completely different formula comes out in first place – ‘commodity-money-commodity’: first we sold gas, then we extracted it, our product – our rules.

We don't play games that we didn't make up the rules for....You cannot describe the state of your energy system or economic system without knowing the rules of a particular commodity market or knowing the volume of supply in that market. And in this situation, it turns out that the institutions of the Bretton Woods system, global international institutions, lose their meaning. They don't work, and they die off quietly...The Bretton Woods system of nominal value regulation, in contrast to the possible control over the supply of commodities, provides a powerful inflationary impulse.”
Aleksey Miller, Chairman of the Gazprom Management Committee, at the St. Petersburg Economic Forum, June 16 2022

“A major blind spot in U.S. strategic economic doctrine is the increasing use of physical gold by China, Russia, Iran, Turkey and others both to avoid the impact of U.S. sanctions and create an offensive counterweight to U.S. dominance of dollar payment systems…Russia, China, Turkey, and Iran constitute a new “Axis of Gold” prepared to undermine confidence in the U.S. dollar.”
Jim Rickards, 2017

'Due to a significant change in market conditions, the Bank of Russia is adjusting its pricing policy when buying gold from credit institutions. From 8 April 2022, the Bank of Russia will buy gold at a negotiated price.'

'A credit institution shall mean a legal entity which is entitled to perform banking operations stipulated by this Federal Law to generate profit as the main goal of its activity on the basis of a special permit (licence) of the Central Bank of the Russian Federation (Bank of Russia). A credit institution shall be established based on any form of ownership as a business entity.'

• control the capital of export-earning industries
  
• control the reserves of currencies held at the Russian Central Bank
  
• control the amount of rubles emitted into the economy
  
• control domestic bank interest rates, and, through government development investment
  
•  control domestic economic development pace at a prudent and fiscally conservative level

"1.5. When calculating the values of the AFP, recounting positions expressed in foreign currencies and precious metals should be rubles.
It is carried out at official rates (cross rates) of foreign currencies in relation to the ruble and prices for precious metals set by the Bank of Russia on the date for which the calculation is carried out....
...2. An additional new limit is introduced for a balance sheet for individual foreign currencies and precious metals with a transition period, during which a gradual reduction in the limit occurs up to its target value of 20%. This limit is designed to stimulate credit organizations to manage currency risk using balance tools, i.e. excluding derivatives of financial instruments, in order to avoid losses as a result of the implementation of risks of non-fulfillment (termination) of derivative financial instruments in conditions of instability in financial markets."
Central Bank of the Russian Federation (Bank of Russia) - google translate, probably early 2023

"The outline of the new type of socio-economic structure will, of course, be determined to a very large extent by the Russian Federation, and there is no doubt about that"
Aleksey Miller, Chairman of the Gazprom Management Committee, at the St. Petersburg Economic Forum, June 16 2022

'Russian President Vladimir Putin has instructed that an interagency working group be formed in order to draw up new mechanisms in the field of FX regulation and international settlements...

...Furthermore, the working group will draw up state policy measures aimed at "reduction of risks, connected with the suspension of operations with Russian foreign assets, to provide conformity of the balance of payments structure to the aims of stable economic development"
Interfax, 11 May 2022

• limits on the amount of Russian capital that can be exported
• limits on loans raised overseas
• Ilimits on government spending (so that resources are allocated primarily to economic development projects within Russia and friendly countries that trade in rubles, such as CSTO countries)

"This is a tool by which the central bank can protect the economy from external crises. In dire situations, they ensure the payment of foreign currency debt, critical imports, and stabilize the foreign exchange market. Keeping reserves inside the country or spending them inside the country is like having no reserves, no protection at all from external crises. This is how our country lived in 1992-1999" - Russian Central Bank, Interfax 26 March 2022

'Correspondent banking is an arrangement whereby one bank (correspondent) holds deposits owned by other banks (respondents) and provides those banks with payment and other services. Correspondent banking networks are critical for firms and households that conduct business or send payments internationally. The arrangement requires that respondents open accounts in the correspondent's books and are able to exchange messages to settle obligations by crediting and debiting those accounts

Most cross-border payments flow through a correspondent banking network, and the overwhelming majority use the SWIFT financial messaging service...Those payments includes remittances and trade finance, but also wholesale payments related to financial market activity.'
'On the Global Retreat of Correspondent Banks' BIS Quarterly Review 01 March 2020

The 'fiscal rule' was introduced in 2015 to reduce Russia's dependence on the price of natural resources (such as gas and oil) dictating the exchange rate of the ruble. A policy on financial stability was developed at the same time, as were Treasury and Central Bank 'instruments' to implement the policy. Reserve assets were key to the system working.

The fiscal rule limits the extent to which government spending relies on tax revenue from companies involved in natural resources (many of the largest are government majority controlled) to meet budgetary spending. Why? Because commodity prices are volatile, and if a budget commits to spend based on assumed tax income, but there is an economic downturn and the prices fall (as they have in the past - oil prices have crashed, as have gas prices, gazprom has lost money), the government books will end up in the red.

1. They act as a carefully regulated savings account that is added to and withdrawn from to stabilize Russian domestic budgetary spending. As a result Russia does not need to raise much capital from debt instruments such as government bonds.


2. The ruble is a 'floating' currency whose value is determined by the foreign exchange market. The reserve assets are used to 'automatically' keep the value of the ruble relatively stable by selling rubles from taxation on windfall profits from oil, gas, and wheat (and other) commodities for foreign currency denominated assets, and buying rubles when the price of exports goods are low. The rubles are bought from the sale of some of the foreign assets previously bought in the 'good times' of high prices and high tax income. The profits are used to flesh out the domestic budget in times of low tax intake (due to low commodity prices).

So there is a balanced flow of foreign currency, buying and selling, depending on (mainly) oil, gas, minerals, and wheat price peaks and troughs. The Federal Treasury controls these money flows, whether buying or selling foreign assets, not the Central Bank. There can be no speculation on currency, as the value of the foreign exchange purchases is capped at the ruble value of accumulated windfall tax from high export prices, and sales of foreign currency are capped by the amount of foreign currency denominated assets purchased in earlier periods of abundance

The Central Bank has a limited role as a buffer in times of emergencies to keep the ruble exchange rate within bounds (and thus dampen inflation), which the bank can now only implement through the unsanctioned component of the Central Banks foreign exchange reserve holdings, that is, holdings of foreign currency assets of friendly countries.

"These restrictions mean that these FX operations under the fiscal rule cannot be considered as setting or managing the rouble exchange rate policy. The rouble exchange rate continues to be free-floating, and the Federal Treasury is a large FX market participant that cannot and does not aim at a particular rouble exchange rate.

All purchases and sales of foreign currency are sterilised via the central bank’s monetary policy operations. The Central Bank of the Russian Federation administers the FX purchase and sale operations under the fiscal rule and may stop them if it determines that they are a threat to the financial stability. The foreign currency accumulated by the Federal Treasury’s purchases under the fiscal rule has the effect of increasing Russia’s FX reserves.

However, sales of this foreign currency are limited by the overall amount and schedule of budget spending.

From an FX reserves management perspective, any spending (portfolio outflow) of foreign currency under the fiscal rule is relatively predictable in terms of amounts flowing out during the next few months.

This relatively new type of financial policy has two sets of implications for financial stability:
(i) issues that are commonly experienced worldwide; and
(ii) country-specific issues.
The commonly experienced financial stability issues arose mainly during and after the 2007–09 global financial crisis. Among these, free-floating exchange rates proved to be a generally better shock-absorbing policy than FX intervention-based policy. The trivial conclusion is that, during the crisis, more FX reserves were better than less. Further, excess debt creation in an economy should be more closely monitored and addressed in good time etc.

The country-specific financial stability implications for Russia arise mostly from the industrial structure of the economy, its emerging market economy characteristics, and the sanctions regime that restricts the access of Russian corporations and government to the global capital market.

Russia’s financial stability policy assumes the possibility of FX intervention, including outright sale of foreign currency and foreign currency lending (FX swaps, FX repo and FX lending). Outright foreign currency sales are decided on an ad hoc basis; the timing and amounts are not precisely predictable, and any intervention would require sterilisation via monetary policy operations.

The central bank provides FX lending through overnight swaps available daily on standby terms. Other types of FX lending (repo and loans) may be quickly activated if needed. But the unpredictability as to the timing and amount of any intervention creates a challenge for FX reserves management and, as a result, a strong FX liquidity preference is applied when the FX reserves asset allocation is decided.

Asset allocation decisions (on currencies, asset classes etc) reflect to the extent possible the estimated amounts, currencies and timing of potential reserves usage."
BIS Papers No 104

"Beginning in 2015, a mechanism was established that made it possible to ensure a fairly stable exchange rate amid conditions of a floating ruble, although the ruble's volatility did increase after the transition to a floating exchange rate, he said.

"The key element of this mechanism was, as you know, the fiscal rule, which thanks to simply automatic procedures established at the regulatory level made it possible to balance the ruble's exchange rate within certain ranges. And not by means of [money] issuance - this is very important.

The Bank of Russia's options for managing issuance expanded and, accordingly, this was one of the cornerstones of inflation targeting, to which the Bank of Russia transitioned in the past seven years. Now this mechanism has virtually evaporated, stopped working. This is due to the blocking of the Bank of Russia's reserves and the automatic suspension or cancellation of the fiscal rule because of this," Belousov said, explaining the need to discuss a new mechanism."
First Deputy Prime Minister of the Russian Federation 20 June 2022

The flaw in this mechanism is now obvious. All this buying and selling of foreign assets has been crippled by the West banking restrictions. Not only is part of the existing government savings locked up, the very mechanism of buying foreign currency denominated assets is frozen for Russia.  And there you have it. The West has interfered in the deepest working of the entire Russian domestic economy. You have to give them credit for their malicious audacity. The West does not seem to understand that there will be a commensurately big price to pay, and the only questions are: how much? When?

In the meantime, the ruble has been somewhat destabilised. By mid May 2022 the Russian currency briefly hit 55.63 rubles to the US  dollar - the strongest since February 2018. In June 2022 the First Deputy Prime Minister of the Russian Federation said "As concerns the optimal exchange rate, the more or less consensus opinion is that this is a rate in the range of 70-80 rubles per dollar." In other words, the ruble needs to be at the balance point where Russian exports are not too expensive for overseas customers, and the ruble not so weak that vital imports become too expensive for domestic consumers. But the mechanism for keeping balance is no longer fully working.

The 'tool' Russia has to regulate the exchange rate and provide a hedge against income fluctuations is now only half a tool - it will only work with unrestricted buying and selling of the currencies of 'friendly' countries.

What solutions to this dilemma are possible? One partial answer would be to junk the commodity indices whose 'spot market' speculations heavily influence the stability of the price of commodities, and therefore the stability of the ruble exchange rate. Indices based on long term contracts for Russian commodities would be favorable for everyone. I suspect Russia will move in this direction.

Article 27
The Board shall be composed as follows:
(1) The Governors for the time being of the central banks of Belgium, France, Germany, Great Britain, Italy and the United States of America (hereinafter referred to as ex-officio Directors).
(2) One person jointly appointed by the Governors of the central banks mentioned in clause (1), and being of the nationality of one of their central banks.
(3) Not more than 11 persons to be elected by the Board by a two-thirds majority from among the Governors of the central banks of countries in which shares have been subscribed but of which the central bank does not delegate ex-officio Directors to the Board

The Bank for International Settlements, known as the central bank for central banks, has suspended Russia from using its services following Western sanctions.

The move will prevent Russia’s central bank from accessing banking services at the Basel, Switzerland-based institution. Following Russia’s invasion of Ukraine, the U.S. and European Union blocked Russia’s central bank from utilizing about 40% of its $630 billion reserves.

Foreign reserves are by their nature held abroad, often in government bonds of other nations as well as at accounts with commercial banks and other nations’ central banks. The U.S. and European countries imposed sweeping sanctions on Russia in response to its invasion of Ukraine. Those strictures bar Russia’s central bank from conducting transactions with domestic banks in those countries, removing its ability to procure dollars and euros through selling its reserves.

Prior to the announcement by the BIS, economists said it was unclear whether the sanctions would prevent Russia’s central bank from accessing accounts and other services at the BIS.

“The Bank for International Settlements is following international sanctions against the central bank of Russia, as applicable, and will not be an avenue for sanctions to be circumvented,” a BIS spokeswoman said. “The access of the central bank of Russia to all BIS services, meetings and other BIS activities, has been suspended.”

Article 55
(3) All deposits entrusted to the Bank all claims against the Bank and the shares issued by the Bank shall, without the express prior agreement of the Bank, wherever located and by whomsoever held, be immune from any measure of execution (including seizure, attachment, freeze or any other measure of execution, enforcement or sequestration).

"We welcome progress on voluntary channeling of Special Drawing Rights (SDRs) from countries with strong external positions to support countries most in need, as well as the IMF’s decision to establish the Resilience and Sustainability Trust (RST). We look forward to early operationalization of the RST"
14th BRICS Summit Beijing Declaration, 23 June 2022

"The global financial institutions, which the international community created to narrow the gap between rich and poor countries, have been made hostage to the few “privileged” shareholders who decided that they have a moral right to provide financial assistance based on the “friend-foe” principle. The leadership and management of the International Monetary Fund (IMF) and World Bank (WB) organisations regularly take unacceptable decisions to block the allocation of funds for “technical” reasons such as outstanding debts and minimum number of days in arrears, or unsubstantiated political pretexts such as political uncertainty, the absence of a legitimate government, and the inclusion of countries that apply for financial support on sanction lists.

For example, on November 1, 2020, the IMF and the WB suspended the evaluation of Venezuela’s positions in their management bodies and excluded it from their multi-country  directorates. In other words, Caracas was banished from the decision-making process even though it retained its stake in the share capital and its guaranteed rights as a shareholder. It is notable that the financial bodies’ decision was not based on the countries’ vote but on the volume of the voting share, which means that the decision was based on the opinion of the G7 countries. Neither did they hold an official survey of the member states’ opinions. Despite the attempts to present the situation as a “procedural compromise,” it is a clear example of the management abusing its powers so as to put pressure on the government that is seen as undesirable in the West, and hence on the country’s legitimate leader, Nicolas Maduro.

Syria is another example of this behaviour. Pressured by the main shareholders led by the United States, all World Bank operational activity and technical assistance to Syria were halted following the start of the civil war in 2011. Since then, the WB group has only provided assistance to Syrian refugees through the provision of funds to neighbouring states. Although the budget of the International Development Association (IDA) stipulates the allocation of $1 billion to Syria in 2020-2022, the IDA management has been delaying the transfer of the funds to Damascus, allegedly because it is unable to provide administrative support and because Syria must first repay $13 million in payment arrears to the World Bank. During the Covid-19 pandemic, the IMF management took a selective stand on the requests for emergency financial assistance submitted by some (that is, not Western-oriented) countries, including Belarus, Iran, Syria and Venezuela. Political concerns prevailed over social and humanitarian considerations, although the requests were submitted in accordance with the procedure based on the need to deal with the emergency epidemiological and social situation.

It is also unacceptable that international financial institutions joined the US and EU’s unilateral illegitimate sanctions. The World Bank has not approved any new loans to or investments in Russia since July 2014 based on the position of the G7 countries. As the result, the Russian economy has not received at least $1.7 billion that should have been allocated under 10 approved projects. Russia’s private businesses have been denied access to the instruments of the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA). In 2022, the WB Group stopped all its programmes in Russia, including technical support and assistance to non-financial sectors, and curtailed the operation of its offices in Moscow without an official notification.

Likewise, the European Bank for Reconstruction and Development (EBRD) joined the sanctions pressure on Russia in 2014. Violating Russia’s shareholder rights (Russia is the seventh largest shareholder), it adopted a “political guidance” on blocking all operations with Russia at the level of the Board of Directors. In other words, the EBRD restricted operations with all Russian counterparties long before its Board of Directors adopted Resolution 245 on the suspension and modification of Russia’s access to bank resources was adopted on April 1, 2022. The bank used a similar method to suspend its operations with Belarus from 2010 to 2016 and after 2020. As the result of this discrimination, the share of Russian programmes in the EBRD portfolio has been slashed from 30 percent in 2013 to less than 2 percent in 2021.

Washington and its partners’ unwillingness to change the status quo in international financial institutions can be seen from the long-standing effort to stall the IMF reform. The agreements on the Fund's management system reached back in 2010 at the G20 Seoul summit have not yet been fully implemented.

Over the past 12 years, there has been no progress in calculating shareholder quotas based on more equitable criteria which is the most important concern for the developing countries. At the same time, the under-representation of certain countries in the Fund, primarily BRICS members, in terms of their actual economic impact, is becoming increasingly obvious.

Contrary to IMF statutory documents, attempts are being made to ban the provision of US dollars to Russia (and Belarus) in exchange for special drawing rights (SDRs) which undermine confidence in the US currency and the foundation of the existing system of international settlements."
Ministry of Foreign Affairs of the Russian Federation, 23 March 2023

'We acknowledge the importance of strengthening the Contingent Reserve Arrangement (CRA) mechanism, which contributes to strengthening the global financial safety net and complements existing international monetary and financial arrangements. We support the amendments to the CRA Treaty, and welcome the progress in amending other relevant CRA documents.

We look forward to the finalization of the amendments which would enhance the flexibility and responsiveness of the CRA mechanism. We look forward to the successful completion of the fifth CRA test run later in 2022. We support the work to improve the framework for coordination between the CRA and the IMF.'
XIV BRICS Summit Beijing Declaration 23 June 2022

"Russia and its partners in the Eurasian Economic Union seek to make it a globally competitive integration group. The EAEU’s agenda includes building a common market for electricity, oil, petroleum products and gas, harmonising financial markets, and linking our customs authorities. We will also continue to work on a greater Eurasian partnership. Colleagues, this is a turning period for the entire world and those who are willing and able to change, those who are taking action and moving forward will take the lead. Russia and its people have expressed this will at every defining moment in our history. In just 30 years, we have undergone changes that took centuries in other countries."
Vladimir Putin, President of the Russian Federation, March 1, 2018

YEREVAN, March 14 - Sputnik. "The member states of the Eurasian Economic Union (EAEU) and China will develop a project for an independent international monetary and financial system. This was agreed upon by the participants in the economic dialogue "A New Stage of Monetary, Financial and Economic Cooperation between the EAEU and the PRC. Global Transformations: Challenges and Solutions", which was held on March 11 via videoconference.
It is envisaged that the system will be based on a new international currency, which will be calculated as an index of the national currencies of the participating countries and commodity prices. The first draft will be submitted for discussion by the end of March. As Sergei Glazyev, Minister for Integration and Macroeconomics of the EEC, emphasized, China was the first in the world to move to the stage of national economic recovery."
- Translated by Andrei Martyanov in 'This-is-important' March 15 2022

"The illegitimate freezing of some of the currency reserves of the Bank of Russia marks the end of the reliability of so-called first-class assets.
In fact, the US and the EU have defaulted on their obligations to Russia. Now everybody knows that financial reserves can simply be stolen.

And many countries in the immediate future may begin – I am sure this is what will happen – to convert their paper and digital assets into real reserves of raw materials, land, food, gold and other real assets which will only result in more shortages in these markets."
Vladimir Putin 16 March 2022

• the messaging system (SWIFT)
• international credit card payment systems
• independent rating of countries and banks credit risk.

'Russian President Vladimir Putin has instructed that an interagency working group be formed in order to draw up new mechanisms in the field of FX regulation and international settlements.
One of the group's tasks will be "to develop a plan for the formation of the infrastructure of international settlements with trading partners from friendly foreign countries and friendly territories, including in Russian rubles or national currencies of such states and territories, and control over the implementation of this plan."'
Interfax 11 May 2022

"In order to mitigate sanctions risks to trade and economic cooperation between Russia and Latin America, we are consistently working to introduce alternative financial mechanisms to Western ones, and that includes non-cash payment and direct correspondent relations between banks. We are also taking a number of other steps towards this goal"
Foreign Ministry Spokeswoman Maria Zakharov, June 8, 2022.

'... the group will develop a second plan for the formation of of international settlements infrastructure, including in Russian rubles, with trading partners from countries that commit unfriendly acts against Russia.'
Interfax 11 May 2022

'Russian President Vladimir Putin has instructed that an interagency working group be formed in order to draw up new mechanisms in the field of FX regulation and international settlements. the interagency group is to be headed by presidential aide Maxim Oreshkin and will include Central Bank of Russia (CBR) Governor Elvira Nabiullina (by agreement), Finance Minister Anton Siluanov, Economic Development Minister Maxim Reshetnikov, as well as the heads of the Federal Tax Service, Federal Customs Service, Rosfinmonitoring, deputy ministers of Agriculture, Industry and Trade, Foreign Affairs, Energy, and representatives from several other agencies.

...the interagency working group will be "a coordinating body established to ensure effective cooperation between federal authorities, the Central Bank of Russia, authorities of Russian constituent subjects, other state bodies and organizations in the implementation of state policy on currency regulation and international settlements."

One of the group's tasks will be "to develop a plan for the formation of the infrastructure of international settlements with trading partners from friendly foreign countries and friendly territories, including in Russian rubles or national currencies of such states and territories, and control over the implementation of this plan."

...the group will develop a second plan for the formation of of international settlements infrastructure, including in Russian rubles, with trading partners from countries that commit unfriendly acts against Russia.

The working group will have to draw up procedures for each of these two plans for settling payments with trading partners, including dealing with trade financing transactions.

Another task for the group will be "to develop measures of currency regulation in order to ensure the balance of supply and demand for transactions in the foreign exchange market."

'Russian President Vladimir Putin has instructed that an interagency working group be formed in order to draw up new mechanisms in the field of FX regulation and international settlements

Furthermore, the working group will draw up state policy measures aimed at "reduction of risks, connected with the suspension of operations with Russian foreign assets, to provide conformity of the balance of payments structure to the aims of stable economic development"
Interfax, 11 May 2022

"We do understand what strategic planning is all about - how we could use money to finance investment, also currency control, no drain of the capital, public-private partnership, well-being of the people, and so on.

...Americans are extremely strong because of hegemony of dollars. But it is not like yuan is going to substitute - no. It will be a different currency/financial system.

We are going to launch a new currency which is going to be based on International Treaty, and the currency cannot be used in the interests of one country or group of transnational corporations. It must be a digital instrument, based on the contracts, and every country must have the opportunity to issue this currency for international payments, and inside the countries they are going to have national currencies, and we suggest, this type of currency.

I believe that Russia during its BRICS presidency is going to give a good impetus to its development and will get [?achieve] a new currency/financial system with a transparent mechanism. And there will be no opportunity to have the banks - American banks - work ...sanctions through banks.

Russia is working hard to prepare the world convention on digital security. BRICS could take it [?take it up]. Well, America is cyberterrorist number 1 in the world, but at least for us [?BRICS] we could have real information safety [indecipherable] embargo the countries that conduct such cyberterrorism.
Sergey Glazyev, SPIEF 2024 session 'Polycentricity: The norm of a future world without colonies and hegemons' 8 June 2024

"Last week, the US Treasury's Office of Foreign Assets Control (OFAC) announced that it was ready to impose sanctions on any institution outside Russia using the country’s [MIR] payment system. Later, sources told the Financial Times of the US and EU’s intention of putting pressure on Turkish banks...Turkey’s Isbank and Denizbank announced on Monday that they have halted the use of Russia’s Mir payment system following a warning from Washington that financial institutions risk secondary sanctions if they help Moscow bypass US penalties...[MIR cards] are currently accepted in Turkey, Vietnam, Armenia, South Korea, Uzbekistan, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan, South Ossetia, and Abkhazia"
RT 19 September 2022

"Cutting off Mir is one of the best ways to protect a bank from the sanctions risk that comes from doing business with Russia. We expect more banks to cut off Mir because they don’t want to risk being on the wrong side of the coalition’s sanctions"
Anonymous USA government official as quoted by US government 'news' site

The FPS (Fast Payment System) application, which makes it possible to pay for purchases via NFC tags and a QR code, has disappeared from the App Store. The Hello! app, where promotions and cashback for clients of the Mir payment system and the Fast Payment System are collected, was also removed.

"The process of reconfiguring financial settlement mechanisms has been launched, eliminating the unnecessary involvement of Western companies and operators. Instead of SWIFT, we are switching to the proven Russian financial messaging system for contract settlements, similar to the national systems of your countries..."
Vladimir Putin, at the Russia–Central Asia Summit with Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan 14 October 2022

"As for SWIFT, for many years, as I said, when the nature of our Western partners, who are entirely unreliable, became more and more obvious and known, we started developing national payment systems. In Russia, the Central Bank several years ago established a system of communication of financial information. India has a similar system which is called RuPay. And it is absolutely clear that more and more transactions would be done through these systems using national currencies, bypassing the dollar, euro and other currencies, which proved totally unreliable."
Foreign Minister Sergey Lavrov, 1 April 2022

"In order to mitigate sanctions risks to trade and economic cooperation between Russia and Latin America, we are consistently working to introduce alternative financial mechanisms to Western ones, and that includes [...] direct correspondent relations between banks. We are also taking a number of other steps towards this goal"
Foreign Ministry Spokeswoman Maria Zakharov, June 8, 2022.

"The process of reconfiguring financial settlement mechanisms has been launched, eliminating the unnecessary involvement of Western companies and operators. Instead of SWIFT, we are ...expanding the practice of opening direct correspondent accounts between lending institutions."
Vladimir Putin 14 October 2022

"Last year [2022], the US Treasury and the Federal Reserve Bank of New York began enforcing stricter controls on international transactions by Iraqi commercial banks, forcing them to comply with specific SWIFT global transfer system criteria to access their foreign reserves.

The move was allegedly meant to “curtail money laundering and the illegal siphoning of dollars to Iran and other heavily sanctioned [West Asian] countries.” However, the sudden rules change for Iraqi banks sent the economy reeling as 80 percent, or more of Iraq’s daily US dollar wire transfers could no longer be completed."
The Cradle, 22 February 2023

"On 8 February, 2023, an Iraqi delegation led by Deputy Prime Minister and Minister of Foreign Affairs Fuad Hussein arrived in Washington to discuss easing the recent US Treasury measures that have restricted the supply of dollars to Baghdad and imposed sanctions on the Central Bank of Iraq.

The high-level delegation, which includes several government officials, has indefinitely extended its stay in Washington for the “difficult” negotiations, indicating Iraq’s limited options in these talks. If the discussions fail and Washington does not ease its punishing measures, a major crisis could erupt in Iraq – resulting in the collapse of the dinar’s value because of high demand and limited supply.

A Washington Institute report suggests that the US is exerting “severe” pressure on Baghdad to redirect its energy sector away from Iran and to address allegations that its banking sector assists the Islamic Republic in evading western sanctions. These demands are likely to be challenging for Iraq to meet, given its vital ties to Iran and the importance of the energy sector to its economy....

...Hours before the Iraqi delegation headed to Washington, Russian Foreign Minister Sergei Lavrov visited Baghdad and held talks with Iraqi officials about the dollar crisis and ways to enhance energy cooperation. One of the proposals discussed was for Iraq to join a system that uses the Chinese yuan to facilitate trade with Tehran and Moscow, which are both subject to US sanctions. This move could provide Iraq with an alternative to the US dollar and help to mitigate the effects of the sanctions.

...According to official sources in Sudani’s media office, Baghdad does in fact “aspire to obtain membership in the Asian Development Bank and deposit the financial surplus in it instead of buying US bonds or increasing the financial reserves of the dollar.” The Asian Bank, the sources say, grants larger loan amounts with fewer conditions and lower interest rates than the World Bank.

Likewise, Iraq plans to submit membership requests to join the multipolar BRICS+ group of countries and the Chinese-led Shanghai Cooperation Organization (SCO)."
Zaher Mousa, The Cradle, 16 February 2023

"We have several international depository locations. At Russian brokers, they keep securities in our settlement depository. Our settlement depository is already in international depositories...As for European stocks, settlements in euros are difficult now. European banks have tough restrictions on transactions in euros, so this is now temporarily suspended...The opportunities for transactions on the accounts of Russian companies in Euroclear are limited, so, when you sell something, these securities need to be transferred to other depositories. These transactions are temporarily not being carried out. "
Roman Goryunov, head of SPB Exchange, March 25 2022

"Essentially, (confiscation) is a breach of the basic principles of central bank reserve protection,...In international law, this is one of the key, basic principles of immunity of central bank assets from coercive measures of seizure. ...In our view, deviation from this principle, will lead to the, albeit gradual, undermining of the system of international finance and the position of reserve currencies in the world."
Govenor of the Central Bank of Russia, Elvira Nabiullina 17 February 2024 

"When Russian securities reach maturity and are reinvested by financial intermediaries, they generate income. Euroclear received EUR 3 billion in profit from frozen assets in the first nine months of this year.Euroclear voluntarily segregated profits from the Russian assets, but says it incurred EUR 34 million in management and legal costs, as well as an estimated EUR 18 million in lost revenue."
European Pravda 7 November 2023

"According to Mostri, the organization has faced 50-100 lawsuits in Russian courts over frozen assets and the number of cases is likely to grow. She noted that the company has already lost several cases and, despite appeals, it is unlikely that the result will change."
Oreanda News 15 February 2024 

“We are now testing the digital ruble with fifteen banks, this is really a test mode on how to open wallets on the digital ruble platform, how to make transfers between customers, how to pay for goods and services, including via QR codes...it is very important for us that there is trust in this new form of digital ruble, all cybersecurity issues have been resolved so that it is seamless, convenient for people and comfortable.”
Central Bank of Russia Governor Elvira Nabiullina 16 September 2022

"...we quickly, within two years, built an infrastructure of our own design. This platform relies on a hybrid architecture and combines the advantages provided by a centralised system with the distributed register technology, blockchain.

Individuals and legal entities will be able to use this platform to open digital wallets to credit digital rubles.

The Bank of Russia is operating this platform meaning that the Bank of Russia is liable for operations with digital rubles and the safety of funds kept in digital wallets. Transactions and digital wallet balances will be protected by bank-client privilege in the same way regular bank accounts are."
Central Bank of Russia Governor Elvira Nabiullina, 19 July 2023 

"The digital ruble is the third, additional form of national currency same as cash and non-cash money. All three forms will be equal meaning that one digital ruble will be equal to one cash ruble and one non-cash ruble. It complements the existing payment instruments that we use now. These funds will be used for payments and wire transfers, meaning that deposits or loans in digital rubles will not be available."
Central Bank of Russia Governor Elvira Nabiullina, 19 July 2023 

"We will continue to work with friendly countries to create effective and safe logistics corridors, relying on cutting-edge solutions for building a new global financial architecture that would be free from any political interference. This is especially important considering that the West has been undermining its own currencies and banking system by literally sawing off the branch it is sitting on."
Vladimir Putin 29 February 2024

"The RPC initiative was established to strengthen and enhance collaboration on payment connectivity through the development for faster, cheaper, more transparent, and more inclusive cross-border payments. The cooperation encompasses several modalities, including QR-code and fast-payment based cross-border payments. The goal of the RPC is to make inter-country payments more seamless, convenient, and affordable, allowing individuals and businesses to conduct transactions across the ASEAN region with ease.

The inclusion of SBV has increased the RPC group from five to six ASEAN Central Banks. This partnership aims to further support post-pandemic economic activities across the ASEAN region, including the promotion of tourism and other service industries. The expansion is also expected to benefit small and medium-sized enterprises, which are crucial to the region's economic growth. By connecting their payment systems, ASEAN member states can increase trade, investment, and remittances within the region. These are expected to widen financial inclusion and significantly contribute to the overall advancement of the ASEAN economic community. Going forward, the RPC can also be expanded to neighboring economies and other countries beyond ASEAN."
Central Bank of Malaysia 25 August 2023

"in 2021 it launched SWIFT Go for low-value cross-border payments in the SME segment. Because this is a SWIFT initiative, it was not hard to get banks to sign on: About 600 lenders in 120 countries are currently part of the network."
Zennon Kapron 23 May 2023

“The key driver for the growth of bilateral trade and investment is the increase of demand for commodities and investment assets, unfortunately, China’s demand for Russian goods and assets stays quite weak. The only Russian commodity China is really interested in is oil, but there is no reason to expect a sharp increase in supply. China is not interested in the ruble, so de facto, payments can only be performed in yuan.
On the other hand, considering the fact that yuan is not a freely convertible currency, Russia can only use it in transactions with China"
Carnegie Endowment for International Peace April 25, 2017

"On 19 January 2023, the Bank of Russia launches a new standing facility to provide yuan — overnight CNY/RUB sell/ buy FX swaps with the settlements of the first and second legs to take place on the transaction date and the next business day, respectively...The new instrument is intended to limit the volatility of money market rates in the event of temporary imbalances.

The daily maximum limit for this instrument will be ten billion yuan with an effect from 19 January 2023. The Bank of Russia will adjust the limit, if necessary...The transactions will be made in on-exchange trading of the Moscow Exchange as open-trading transactions.

The swap points will be calculated using O/N SHIBOR (Overnight Shanghai Interbank Offered Rate) plus 2.5 percentage points as the interest rate for yuan, and the Bank of Russia key rate minus 1 percentage point as that for rubles."
Bank of Russia press release 17 January 2023

"To put it bluntly, we need to complete the European capital markets union. This will be pivotal in determining whether the euro remains among the leading global currencies or others take its place.

Central banks also have an important role to play here – even as protagonists. For example, the manner in which swap lines are used could influence the dynamics of major international currencies…. We have already seen the PBOC set up over 30 bilateral swap lines with other central banks to compensate for the lack of liquid financial markets in renminbi.

How central banks navigate the digital era --such as innovating their payment systems and issuing digital currencies-- will also be critical for which currencies ultimately rise and fall.

So, we need to be ready for the new reality that may well lie ahead. The time to think about how to respond to changing geopolitics is not when fragmentation is upon us, but before. Because, if I may paraphrase Ernest Hemingway, fragmentation can happen in two ways: gradually, and then suddenly. Central banks must provide for stability in an age that is anything but stable. And I have no doubt that central banks will measure up to the challenge.”
Christine Lagarde, ECB President, 18 April 2023

"In 2013, the year before the new Maidan protests and the coup, when Ukraine was bent on signing an Association Agreement with the EU, the Ukrainian leadership headed by the then President Viktor Yanukovich condescendingly informed us about the gist of the matter at the November 2013 CIS summit, in reply to our numerous requests. Before that they never told us anything, although Ukraine was part of the CIS and its free trade zone.
At that point, we took a look and said: dear friends, you know, your commitments under the CIS free trade zone and our commitments imply zero mutual tariffs for the overwhelming majority of goods.
After 18-year talks with the EU on Russia’s accession to the WTO, we obtained substantial 15-20 percent protectionist tariffs for a rather long period and in many areas, including the banking sector, insurance and agriculture. These tariffs were stipulated for a preset period, and they still existed at that time.
Dear Ukrainian friends, you are stipulating zero tariffs with the EU, just like in your relations with Russia. This will breed economic anarchy, with European goods flowing freely to Russia via Ukrainian customs territory. If you are willing to do this, we will be forced to charge protective tariffs on the Russian-Ukrainian border. We suggested promptly holding trilateral talks that would involve Russia, Ukraine and the European Commission. Jose Manuel Barroso, the then Head of the European Commission, said this was none of our business, and that they did not meddle in our trade relations with China or Canada. This is what was said."
Foreign Minister Sergey Lavrov’s interview with RBC TV channel, Moscow 16 March 2022

"The successful performance of the Eurasian Economic Union, the fast growth of the authority and prestige of the Shanghai Cooperation Organisation, the large-scale One Belt, One Road initiatives, plans for multilateral cooperation in building the North-South transport corridor and many other projects, are the beginning of a new era, new stage in the development of Eurasia....

...Europe, the Western extremity of the Greater Eurasia could also become its natural part. But many of its leaders are hampered by the conviction that the Europeans are superior to others, that it is beneath them to take part as equals in undertakings with others.

This arrogance prevents them from seeing that they have themselves become a foreign periphery and actually turned into vassals..."
Vladimir Putin 27 October 2022

"Recently, the EAEU member states have made significant progress in unifying regulations governing retail trade in goods. A process for harmonising national consumer protection regulations has been launched, and general principles and approaches to ensuring food security have been approved.
 A resolution on starting the second phase of forming common EAEU markets for oil and petroleum products was submitted for our approval today...

Our proposal is that acting within the EAEU we should start unifying carbon reporting standards, implement mutually beneficial climate projects, and jointly create our own technologies based on the use of carbon-free energy sources including, of course, nuclear energy and hydropower...
.
A flexible system of relations between the EAEU and other states, as well as integration entities such as the SCO or ASEAN, is being effectively implemented in practice.

In July, a free trade agreement with Serbia came into force, and similar agreements are being negotiated with Egypt and Iran. Talks with India have been given the green light. Research groups are studying the feasibility of creating free trade areas with Indonesia and Mongolia.

All of that is very useful from the point of view of the potential expansion of Eurasian integration and the implementation of the initiative to create a Greater Eurasian Partnership."
- Vladimir Putin October 14, 2021


"I would like to note again that we have every opportunity to build up practical cooperation between the BRICS countries and its partners, the countries represented here...

...It is equally important for BRICS to expand cooperation with regional associations like ASEAN, the African Union, the Association of Caribbean States, the Gulf Cooperation Council and the Indian Ocean Rim Association.

Of course, serious potential is opening up for cooperation between our states in the context of working in the integration processes between the Eurasian Economic Union and China’s huge One Belt One Road infrastructure and trade project.

In general, we are convinced that many serious problems on the global agenda can and must be resolved only by pooling efforts"
- Vladimir Putin June 24, 2022

'ADMITTING that the Interim Agreement leading to formation of a free trade area between the EAEU and its Member States, of the one part, and the Islamic Republic of Iran, of the other part (hereinafter referred to as “the Agreement”) will become a first step towards further trade and economic integration between the EAEU and its Member States and the I.R. Iran;
SETTING the goal to form a full-scale free trade area between the EAEU and its Member States and the I.R. Iran as a core objective;
EMPHASIZING the need for further promotion of mutual relations between the Parties on the basis of mutual trust, transparency and trade facilitation;
EXPRESSING their support to the earliest accession to the World Trade Organization and recognizing that World Trade Organization’s membership of the EAEU and its Member State (that is not yet World Trade Organization’s member) and of the I.R. Iran will create favourable conditions for the deepening of their integration into the multilateral trading system and will enhance cooperation between the Parties to this Agreement...'
Interim Agreement leading to a free trade agreement between the Eurasian Economic Union and Member States and the Islamic Republic of Iran. May 17 2018

 "...I know the sentiment of many of our friends in Asia, and they do not want to join any blocs against anyone. They want to create a network of cooperation in various areas, as I said today, in order to, move forward together taking into account each other's interests and seeking and finding compromises. They do not want to be involved in confrontation between any states, and even more so they do not want to be part of any blocs..."
- Vladimir Putin  3 October 2019

"We will rely on our Vietnamese friends as well as all other ASEAN states to further promote this mutually beneficial cooperation....As one possibility of this kind, let me mention the fact that Vietnam was the first ASEAN country to sign a free-trade agreement with the Eurasian Economic Union (EAEU). Following in Vietnam’s footsteps, some other ASEAN countries, including Singapore, started relevant negotiations. ASEAN as a whole...is keen on exploring the possibility of launching a dialogue on trade liberalisation with the EAEU.
- Sergey Lavrov 17 June 2020


India's External Affairs Minister, S. Jaishankar, addressed an event on 3 June 2022. While speaking on the US-led axis and China-led axis as another potential axis in the world, he said, "This is the construct you are trying to impose on India. I don't think it is necessary for India to join any axis. India is entitled to make its own choices which will be a balance of its values and interests"
ThePrint 3 June 2022


"I would like to note again that we have every opportunity to build up practical cooperation between the BRICS countries and its partners, the countries represented here......It is equally important for BRICS to expand cooperation with regional associations like ASEAN, the African Union, the Association of Caribbean States, the Gulf Cooperation Council and the Indian Ocean Rim Association."
- Vladimir Putin June 24, 2022

11. "We reaffirm our support for an open, transparent, inclusive, non-discriminatory and rules-based multilateral trading system, as embodied in the World Trade Organization(WTO). We will engage constructively to pursue the necessary WTO reform to build an open world economy that supports trade and development, preserve the pre-eminent role of the WTO for setting global trade rules and governance, supporting inclusive development and promoting the rights and interests of its members, including developing members and LDCs.

We recognize that special and differential treatment as established in WTO rules is a tool to facilitate the achievement of WTO objectives with respect to economic growth and development.

We call upon all WTO members to avoid unilateral and protectionist measures that run counter to the spirit and rules of the WTO.

We emphasize the top priority and urgency of launching the selection process of the Appellate Body members to restore the binding two-tier multilateral dispute settlement mechanism. We agree that the Appellate Body crisis should be resolved without further delay and should not be linked with other issues.

We endorse BRICS Statement on Strengthening the Multilateral Trading System and Reforming the WTO..."
14th BRICS Summit Beijing Declaration, 23 June 2022

"The President of Russia is holding several meetings every day concerning the adaptation of the economic, social, banking and financial sphere to the realities that are now emerging as a result of the West’s aggressive and egotistical policy.

...all countries experiencing the negative influence of the egotistical policies of the United States and its satellites have an objective need to "reconfigure" their economic ties in such a way as not to depend on the whims and vagaries of our Western partners.

All these issues are on the daily agenda of Russian President Vladimir Putin’s work. The 25th St Petersburg International Economic Forum, which ended last week, was largely devoted to this."
Sergei Lavrov 22 June 2022

"The BRICS countries have proposed the idea of creating a common monetary unit. The reason for this is simple: we cannot rely on the mechanisms that are operated by those who can deceive you at any moment, going back on their obligations for attaining short-term political goals, both in foreign policy and in domestic processes."
Sergey Lavrov, 23 January 2023


"Serious countries that have respect for themselves are well aware of what is at stake and clearly see the inability of the “owners” of the current international monetary and financial system to negotiate and want to create their own mechanisms for ensuring sustainable development that is protected against outside dictate.

The initiatives that have been voiced recently, literally just the other day, focus on the need to think about creating separate currencies within BRICS and the countries of Latin America and the Caribbean. Without a doubt, this issue will be discussed at the BRICS summit to be held in South Africa in late August 2023. A group of African countries, including President of Angola Joao Lourenco, are invited to take part in this"
Sergey Lavrov 25 January 2023

"I spoke with my Chinese counterpart and with the ministers of Türkiye and Brazil about ways we can transit to new logistical chains that would be protected from the West’s lawlessness, sanctions and other illegal actions, to mutual payments in national currencies in connection with the gross abuses perpetrated by the Americans as the emitters of the US dollar and the European Union as the emitter of the euro. The Japanese are also abusing the yen with a vengeance.

This is a crucial component of our bilateral interaction. It must be protected from the havoc the West is wreaking in the world economy.

Today, everyone is aware of how unreliable the dollar is. Every Third World country, even if it does not say so publicly (although many of them do), is beginning to think how to insure itself against a replay of these arbitrary actions in the long term."
Sergey Lavrov  2 March 2023

"About 70 percent of Russia's trade with the PRC is in national currencies (rouble and yuan). It is less with India, but the share is growing as well as it is with Iran and the UAE. Saudi Arabia is paid for its oil with yuan by China. This is a blow to the dollar. This process will continue.
Sergey Lavrov 8 September 2023 

"I would like to highlight the decision made in May by the heads of government and states of ASEAN. They signed a declaration to promote settlements in local currencies and to harmonise regional payment systems. There are many more examples. We are just at the beginning of a long journey. The de-dollarisation processes will gather speed."
Sergey Lavrov 8 November 2023

"During the summit in August, the BRICS countries clearly outlined the goal...for central banks and finance ministers to submit recommendations concerning alternative payment systems.

Everyone is tired of the US dollar, which has become a tool to exert influence, to undermine the legitimate competitive positions of countries from different regions, to interfere in internal affairs, and to change regimes."
Sergey Lavrov 28 December 2023

"..the set of tools to enhance competitiveness and productivity in the global economy is expanding. Among them is the increasing percentage of transactions in national currencies, which now account for about 90 percent of our country's trade with its key partners. This is our response to the weaponising of the US dollar and other Western currencies to gain a competitive edge."
Sergey Lavrov 22 February 2024

“In 2013, we formed a very good partnership with Mubadala, the sovereign wealth fund of the UAE, and we jointly invested in 45 businesses in Russia. Businesses are absolutely critical for the growth of the Russian economy. Mubadala invested at a critical time for the Russian economy but they got very good returns, probably higher than from any other country.."
Kirill Dmitriev, CEO of the Russian sovereign wealth fund RDIF 15 October 2019

"We are transferring to mutual settlements in national currencies in both rubles and in yuan. As an example, gas supplies today between Gazprom and China are conducted on a parity basis. Oil and petroleum products are also transferring to national currencies..."

"A new structural unit — the International Settlements Department — has been created at the Bank of Russia on 15 February 2023. The Department will deal with issues that have become especially relevant in view of Russia sanctions. These issues include the development of correspondent relations between Russian banks and their counterparties from friendly countries, transition to settlements in national currencies, as well as the expansion of opportunities for cross-border transactions."
Bank of Russia, 15 February 2023

"Question: There have been reports that negotiations on trade in rupees have been suspended. What will the discussion be moving forward? Any comment?
Sergey Lavrov: As for the rupee, this is a problem. We have accumulated billions of rupees in accounts in Indian banks. We need to use this money, but to do this, these rupees must be transferred into another currency, and this is being discussed now.
Sergey Lavrov 5 May 2023

"Since 2003, all Iraqi oil revenues have been paid into an account with the US Federal Reserve. Although Iraqis formed a sovereign government after the US invasion and occupation of their state, Iraq is still restricted from opening accounts for its oil earnings outside the United States....But Iraq's oil funds, which...amount to more than $ 90 billion, remain...in one account in the United States of America."

Allegedly, "no one has thought of diversifying the risks" by putting oil money in multiple banks around the world. Of course the Iraqi government has thought of it. They are either being blackmailed by the USA, corrupt, or there is a written agreement to this effect. Besides, Iraqi Central bank foreign exchange reserves are deposited with the US Federal Reserve. In early  2024 reserves from oil sales reached $120 billion. All deposited in the USA. The Federal Reserve then invests them in (on behalf of Iraq), most likely in US Treasuries and bonds.

Iraq's Ministry of Finance (MOF) imports $10 billion a year of its USA bank account money in the form of US bank notes. The MOF sells these notes to the Iraqi Central Bank. The American Federal Reserve directs the Iraqi Central Bank to strictly enfoce the limitation on the volume of dollars that Iraqi banks, importers, and currency traders may buy. The Iraqi Central Bank also sets the exchange rate for the dollar. The Federal  reserve, in my opinion, probably influences what the rate should be. In any event, the USA controls Iraq's access to its own money. And with it, the purchasing power, and economic conditions in Iraq.

"The US State Department warned that if its troops are expelled, the US could cut off access to a key Iraqi bank account held at the Federal Reserve Bank of New York that holds billions in oil revenues, Iraqi officials told The Wall Street Journal. Shutting off the spigot to Iraq could squeeze the country's access to cash, gumming up its financial system and wreaking havoc on its economy."
Business Insider 12 January 2020 

 

In early 2024 the Central Bank banned the withdrawal of money in the form of US bank notes from those Iraqi bank accounts that receive money from abroad, and it also banned using US dollars in local Iraqi business transactions. Transactions have to be in Iraqi dinar. The measure are to help stabilise the Iraqi currency, which is steadily losing purchasing power against the dollar. At the same time,not only were some major banks money laundering, but various front companies and other entities also 'acquired' US dollars at the official rate and then on-sold it to Lebanon, Syria, Iran, Turkey, Russia, or even as far away as Cuba. Why? Because the US dollar is useful in dodgy transactions, being universally recognised and holding its value much better than many other currencies. Small, tradeable amounts of gold are valued in the Middle East, Asia and India for the same reason.

To launch a new reserve currency, it is necessary to build a joint financial architecture, “increase the share of settlements in national currencies, reach a certain level of de-dollarization, something that is happening already in the BRICS countries,” Nikita Kondratyev, of the Department of Multilateral Economic Cooperation and Special Projects of the Ministry of Economic Development, told RBC.
RT News 27 June 2022

"The best protection against the rotting euro will be the transition to new payment methods in trade with our reliable partners, including through the use of national currencies - the Russian ruble, the Chinese yuan, the Indian rupee, etc. In the future, the creation of a new reserve currency of BRICS countries is also possible. The dollar, euro and pound sterling are clearly not enough for the modern world," Medvedev wrote on his Telegram page on Tuesday, commenting on the parity reached between the euro and dollar exchange rate"
Dmitry Medvedev deputy chairman of Russia's Security Council 12 July 2022


"In August, at the BRICS summit in Johannesburg, the establishment of a shared reserve currency in addition to national currencies was raised, primarily by our Brazilian colleagues. It was decided to instruct finance ministers and central bank governors to explore this idea and to present proposals on alternative payment platforms at the next BRICS leaders' meeting in 2024 in Kazan when Russia will chair the organisation.
Sergey Lavrov 8 November 2023

...the strengthening of the ruble is due to the fact that it is now based purely on exports and imports, and its value is determined by its purchasing power parity (PPP). The International Monetary Fund (IMF) estimated the Russian currency’s PPP at the end of 2021 at 29.127 rubles per one dollar. According to the Big Mac Index, that rate stood at 23.24 rubles to the dollar.
Sergey Kopylov, Plekhanov Russian University of Economics 7 May 2022

"...much of the Global South has sided with Russia throughout the Ukraine war hopefully to speed up the multipolar transition. Multipolar transition...means many things, among which birth of new polarities, end of dollarocracy, redistribution of power, and rise of a region-based and multi-speed globalization."

"With regard to the Iron Curtain, it is already on its way down. They should make sure they don’t get anything caught in it as it goes down.
In all other matters, we have a straightforward position: we are for things being fair."
Sergey Lavrov 30 June 2022