Switching to national currencies is a sanctions-induced necessity, not a goal in itself, the head of VTB Andrey Kostin has explained
Russia has been compelled to transition to national currencies in foreign trade due to Western sanctions but will not abandon Western currencies outright, Andrey Kostin, the CEO of Russia’s second-largest bank VTB, said in an interview with RBK news outlet published on Monday.
“I believe that, of course, we should not voluntarily abandon [the euro and dollar]. We are not opposed to engaging in exports and imports with Western companies; it was their decision to impose sanctions, not ours. Despite the difficulties, we continue to supply gas and other goods,” Kostin said. He attributed Russia’s shift to trading in yuan and other alternative currencies to “problems beginning to arise” with dollar and euro settlements due to Western financial restrictions.
Kostin noted that while a viable dollar replacement is unlikely to emerge in the near future, Russia is committed to establishing a “legal international scheme in which we can make settlements in alternative currencies.” He added that the global community is increasingly interested in payment schemes that are not tied to the dollar due to Washington’s frequent use of its currency as a political tool.
The CEO expressed doubt that Western states would formally prohibit Russia from using the dollar and the euro, as it is not in their best interests.
He remarked, “It would constitute a complete financial blockade. If not only the financial sector but also the manufacturing sector were placed on the sanctions lists, then such a scenario is possible. But I do not see it happening… The EU is no longer considering new sanctions. I think they are also leaving this window open because it is profitable for them. They all buy liquefied natural gas, oil products, and so on from us,” concluding his statement.