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5 Apr, 2021 13:05

US foreign policy undermining reliability of dollar, Russia warns, as Moscow contemplates new rival to Western payment systems

US foreign policy undermining reliability of dollar, Russia warns, as Moscow contemplates new rival to Western payment systems

A top Russian diplomat has warned that the US dollar is becoming an increasingly risky currency on which to base global financial transactions, because Washington is linking its currency more and more to its foreign policy aims.

Deputy Foreign Minister Alexander Pankin told RIA Novosti that recent events have undermined faith in the greenback overseas. The imposition of sanctions and an unpredictable economic policy, he claimed, “call into question the reliability and convenience of using the American currency as the priority currency of deals.”

Instead, the minister said, states are now being “forced to take measures against the risk of economic losses and disrupted transactions. Therefore, there is increasing interest in developing alternative mechanisms. Using other currencies in trade is becoming more and more important on the international agenda.”

Also on rt.com Russia prepared for possibility of being cut off from SWIFT, Kremlin says

At the same time, Pankin confirmed that Moscow is considering the basis for a payment system to rival the Western-run SWIFT international banking network, the largest in the world for processing international transactions. More than 200 countries are connected through SWIFT, but there have been suggestions for a number of years that Russia could be cut out of the network as part of economic sanctions.

Asked in recent weeks whether the country could be cut off from SWIFT, Kremlin spokesman Dmitry Peskov warned that “we cannot rule out any of the potential threats... These actions are unreasonable and unpredictable, therefore, of course, this situation obliges us to be on the alert.”

Last month, Pankin’s boss, Foreign Minister Sergey Lavrov, told his Chinese counterparts that “the United States has declared its mission is to limit the technological development opportunities of both the Russian Federation and the People’s Republic of China.”

In response to sanctions from Washington, he added, the two nations could protect their economies by “switching to settlements in national currencies and in world currencies, alternative to the dollar.” Lavrov added that “we need to move away from the use of Western-controlled international payment systems.”

During the same visit, Lavrov announced that Moscow and Beijing would collaborate to expand the use of SPFS, a Russian financial system that is said to have the potential to compete with SWIFT. “Our respective fiscal authorities, financial departments and the Central Bank will expand its application,” the diplomat said.

Justifying the decision, he argued that Russia and China will do whatever it takes to prevent their economies “from being exposed to any and all threats from nations that are unfriendly towards our countries.”

Also on rt.com Russia & China to bolster financial security systems, reducing dependency on West in response to ‘threats from unfriendly nations’

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