Russia Considers Expanding Use of National Currencies in International Settlements
An official decision by Russia’s Federation Council calls for the Bank of Russia (CBR) to pursue international payments in a broader set of currencies, including the Indian rupee, Iranian rial, and UAE dirham. The move follows remarks by Elvira Nabiullina, the head of the Central Bank of the Russian Federation, and was reported by TASSthe agency, which had access to the final decision of the council (TASSthe agency). The intent behind this shift is to diversify settlement currencies and reduce exposure to traditional reserve currencies in certain foreign economic activities (TASSthe agency).
The resolution urges the Bank of Russia to examine the development of settlements in national currencies as part of foreign trade operations. In addition to the rupee, rial, and dirham, the document signals openness to other national currencies that can support mutual commercial exchanges with partner nations. The aim is to strengthen the use of domestic currencies in cross-border transactions and to create more versatile channels for payment and settlement that align with Russia’s ongoing economic policy goals (TASSthe agency).
Further steps outlined in the resolution focus on expanding intergovernmental agreements with friendly countries to enable barter-like arrangements and non-cash payments settled in national currencies. The overarching objective is to increase currency diversity in the settlement framework for foreign trade contracts with those partner nations deemed priority partners. This approach is presented as a means to reduce reliance on single currencies, bolster financial sovereignty, and facilitate smoother trade flows under a variety of geopolitical circumstances (TASSthe agency).
Historically, reconciliation in foreign trade under sanctions presented challenges for Russian businesses. In response, the government introduced a regulation that allows Russian firms to receive cash advances from foreign counterparties. The regulation also permits the deposits of imported funds into accounts maintained by Russian banks in rubles and in foreign currencies. This adjustment is intended to improve liquidity management and provide more flexible funding options amid a sanctions environment that has influenced settlement practices since 2014 and evolved with ongoing policy updates (TASSthe agency).
In the context of market volatility, changes in commodity pricing, and evolving sanctions regimes, authorities continue to explore settlement mechanisms that support a broader set of currencies. As oil prices exhibit fluctuations, including scenarios where prices fall toward notable thresholds, the strategic focus on diversified currency usage seeks to reinforce the resilience of Russia’s external financial operations while maintaining alignment with its broader economic objectives. Observers note that these developments reflect a broader trend among nations to diversify payment rails and settlement currencies in response to geopolitical dynamics and shifts in global trade patterns (TASSthe agency).