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Saturday, June 15, 2024

Dollar becoming ‘toxic’ – Russia’s top MP

BRICS countries are abandoning the greenback because it is being used as a political tool, Vyacheslav Volodin has claimed

Washington has completely undermined trust in the US dollar as a global reserve currency by using it as a political tool to impose “illegal” sanctions on Russia, State Duma Chairman Vyacheslav Volodin has said.

The US government announced a new batch of sanctions against Russia on Wednesday, targeting the energy, metals, and mining industries, as well as the Moscow Stock Exchange and major lenders Sber and VTB. The measures, which cover 300 additional individuals and entities, are aimed at impacting trade between Russia and its partners in China, Türkiye, and Kyrgyzstan, as well as other nations in Central Asia, the Middle East, and the Caribbean.

Read more: Putin lays groundwork for confiscation of US assets

Russia’s top lawmaker said on Friday that by using the dollar as an instrument of political influence, Washington has pushed other countries to increasingly abandon the greenback.

“The dollar has become toxic. Washington has totally undermined trust in the dollar as a global reserve currency by imposing illegal sanctions against our country’s financial institutions,” Volodin wrote on his Telegram channel.

The sanctions, however, have not yielded the expected results for the US, according to the Russian lawmaker. The global trend towards using national currencies in trade instead of the greenback has gained momentum, Volodin said, claiming that many other nations – in particular BRICS members – are looking for alternatives to the dollar as they don’t want to become “hostages” of US politics.

Read more: Russia-China ties not a threat to other nations – Putin

The lawmaker noted that since 2022, the share of “unfriendly” currencies in Russia’s export settlements has dropped from 84.7% to 17.8%. At the same time, transactions in the ruble and national currencies have surged by 3.5 and 15 times respectively.

According to Volodin, more than 90% of payments between Russia and its partners within the Eurasian Economic Union (EEU) bloc of post-Soviet nations are carried out in national currencies. Russia-China trade is now 95% settled in rubles and yuan, he added.

Volodin went on to remark that payment restrictions and the “theft” of Russia’s gold and foreign exchange reserves should prompt other countries to think about the reliability of storing their funds in US currency.

The dollar has “discredited” itself as a reserve currency and therefore “dedollarization is inevitable,” Volodin argued.