It was ours, will be yours. The ruble is preparing for global expansion

© RIA Novosti / Maxim to Bogodeeva in fotomontajes banknotes at the factory GoznakIt was ours, will be yours. The ruble is preparing for global expansion© RIA Novosti / Maxim to Bogodeeva the image Bank

The Bank of Russia considers possible expansion of the ruble in the countries of the Eurasian Union and CIS. Strengthening the role of the Russian currency in the post-Soviet space in the period to 2035 is considered as one way of internationalization. How well-grounded are these expectations in the material RIA Novosti.

The regional dimension

Forecast the future of the Russian currency last week announced the Deputy Director of Department of monetary policy of the Central Bank Andrey Lipin. «If we talk about the phases and the degree of internationalization of the ruble, then at the moment the most likely, of course, regionalization,» said he.

In his opinion, to 2035, the expansion of the ruble can be expected either within the borders of the Eurasian Union, which, besides Russia, includes Kazakhstan, Belarus, Armenia and Kyrgyzstan, either in the CIS. The use of the ruble by the member countries of the Union in bilateral transactions helps businesses reduce currency risks and bypass administrative barriers.

However, revolutionary changes can be expected. To change the currency of the contract suppliers would take time, said the Professor of finrynkov and financial engineering of Ranhigs Sergei hestanov.

According to the Center for integration studies of the Eurasian development Bank (EDB), now the calculations between the countries of the Union in rubles accounted for $ 69 billion in U.S. — about 18 billion Euro to five billion dollars.

Recently published study of EDB «of the National currencies in mutual settlements in the framework of the EEC: obstacles and prospects», noted that over the past six years, the share of the ruble in the currency structure of payments of the countries of the Union increased from 56% to 75%, and the dollar’s share, by contrast, decreased from 35 to 19%.

EDB chief economist Yaroslav Lissovolik believes that this trend is likely to continue. According to him, more than half of the respondents who participated in the survey, EDB, expect to strengthen the role of national currencies in mutual settlements. Don’t believe in that prospect, 17% of respondents.

«As the main measures for strengthening the role of national currencies seen the development of the capital market, the availability of credit in local currencies and common projects in the real sector and infrastructure. But it is necessary to ensure balanced protection of property rights, to streamline the operations of government agencies and the courts in this sphere», — said Lissovolik.

Therefore, among the priorities of Russia — the transition to settlements in national currencies with other BRICS partners: Brazil, India, China and South Africa. The Bank of Russia and the Reserve Bank of India has begun consultations on this issue in 2009. The mechanism and working of the scheme of calculations in rubles and rupees, and prepared appropriate recommendations to the business.

As a result, the situation is gradually changing. So, in 2013, 96.6% of trade transactions between Russia and India was held in dollars, and the previous year’s figure of 80%, and about 19% of contracts was paid in rubles.

Indian economist, sen Pranab in an interview with Sputnik noted that the transition to mutual settlements in rupees and rubles in bilateral trade will protect from the instability of the dollar. According to him, China uses currency swaps, which played a significant role in turning the yuan into a world reserve currency.

In October 2014, Moscow and Beijing signed an agreement on currency swap — the exchange of rubles and yuan at a fixed rate. The volume of swap lines reached a total of 150 billion yuan ($20 billion).

This contributed to a change in the structure of payments in bilateral trade between Moscow and Beijing. In 2016 the national currency in payment of export of Russian goods and services accounted for 13%, a year later — 16%.

For more active expansion of the ruble on the markets of other countries, according to Lisovolik, required the implementation of a number of conditions. In particular, we need direct quotes of different currency pairs. «Now they are not, the Russian currency has to buy through the dollar or Euro, which increases costs. In addition, it is necessary to create instruments to hedge currency risks,» — said the source RIA Novosti.

© Fotolia / Björn WylezichНациональные currencies of the countries-participants of the BRICSIt was ours, will be yours. The ruble is preparing for global expansion© Fotolia / Björn WylezichНациональные currencies of the countries — participants of the BRICS
To enter the reserves

The increased use of the ruble in bilateral trade with other countries can create the conditions for his recognition as one of the world’s reserve currency. However, this process is not fast. The U.S. dollar supplanted the British pound from the first place about 45 years. Therefore, consider the ruble as a reserve currency will be soon, I’m sure hestanov.

Meanwhile, the Russian economy it would open up new development opportunities. The country issuing a reserve currency gets certain benefits: deficit of the balance of payments the national currency, strengthening of positions of national corporations in the competitive global market.

«However, to speak about the status of the ruble is premature. First you need to take the height of the regional currency in the EEU,» said Lissovolik.