Russia and Vietnam Quadruple Trade Settlements in National Currencies
Trade settlements between Russia and Vietnam, conducted in their respective national currencies, the ruble and the dong, have seen an unprecedented increase in 2023, quadrupling in volume. This significant leap was revealed by Olga Basha, the head of international settlements at VTB bank, who shared this information ahead of the Russia Calling 2023 investment forum.
Rise of National Currencies in Trade Settlements
The shift towards national currencies for cross-border trade, moving away from the dominant US dollar, commenced in 2022. This global trend intensified particularly after sanctions related to the conflict in Ukraine led to Russia being disconnected from Western financial systems and the freezing of its foreign reserves.
VTB Bank: Facilitating Ruble-Dong Transactions
VTB, Russia’s second-largest bank, plays a pivotal role in these burgeoning trade settlements, acting as a market maker in Vietnam. Payments for the ruble-dong currency pair are being processed through a joint bank, indicating a shift towards greater financial independence and interdependence between the two countries.
From China to India: A Global Trend
This trend is not confined to Russia and Vietnam. VTB Bank has also noted an increase in the use of national currencies for transactions across its international subsidiaries and branches. Operations in India and China, as well as throughout the Commonwealth of Independent States, are increasingly turning to national currencies, reinforcing this shift away from the US dollar in cross-border trade.
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