Political expert Aleksei Dzermant commented on how the role of the Dollar is gradually decreasing in the global economy and how Russia's decision to sell energy resources for Roubles affects this process
The President of Russia, Vladimir Putin, signed a decree envisaging conditions for gas trading with ‘unfriendly countries’. “In order to purchase Russian natural gas, they must open Rouble accounts in Russian banks. It is from these accounts that payments will be made for gas delivered starting from April 1st,” the Russian leader said.
Alfa Radio programme host, Vadim Shepet, asked Mr. Dzermant to comment on this serious step and explain what it will mean for the Dollar dominance and global economic relations in general.
“We deal not just with a local conflict on the territory of Ukraine. This is actually a struggle for new rules of the world order. Russia is demonstrating that it is determined to change the order that has been in effect over the last thirty years. This story about trading in Roubles, definitely, affects the Dollar dominance,” Mr. Dzermant said, adding that it is actually not a blow beneath the belt.
“There remains a clear, legally reasoned mechanism for transactions. [They will be made] through a special bank which should not be subject to sanctions, otherwise the West will lose its last connections in relations with Russia. European states can import their currency there, buy Roubles and then use them to pay for oil and gas,” the expert explained.
Mr. Dzermant commented on the scheme, “The mechanism is delicate and interesting. It does not violate contracts concluded with the western states, but at the same time excludes the Dollar from settlements, removes a bank or several banks authorised to deal with such transactions from the influence of sanctions.”
The expert believes the introduction of a new system of Russian Rouble settlements will affect the global financial system, “This will reduce the Dollar significance in the international financial market – thus becoming a clear signal to other players, especially in the Arab world, China and India, that the era of the Dollar is passing away. It is possible to uplift the economy by trading in national currencies. We are finding trading mechanisms without this ‘green intermediary’, and this means that our own currencies will become stronger since they have resources behind them and are supported by some real assets. The Dollar has been pumped up like a soap bubble for a long time, and now it is starting to deflate.”