Russia, Turkey agree to use local currencies to settle payments
Russia and Turkey have taken a major step in their move to de-dollarize mutual trade as the two agree to use local currencies for payments instead of the US dollar.
Russian Finance Ministry announced on Tuesday that Russian rubles and Turkish lira will be used to settle payments as part of an agreement that had been inked between Moscow and Ankara.
The ministry said the agreement would seek “further expansion and strengthening of interbank interaction, as well as ensuring uninterrupted payments between business entities of the two countries.”
Russia and Turkey increased their value of trade to $25.5 billion at the end of 2018. However, the two have sought to gradually switch to use national currencies to offset the impacts of the American restrictions on their financial systems.
Russia has declared that it would go to every length to reduce the share of the dollar from its trade and economic relations with other countries.
The central bank in Moscow announced last week that it had reduced its dollar savings by almost a half, saying it had instead opted for holding reserves in China’s currency yuan, in euro and in gold.
Turkish officials have expressed same desire to end the monopoly of the US dollar from exchanges with major partners like Russia, Iran and China.
In Its Tuesday statement, Russia's finance ministry said the new agreement with Ankara would pave the way for linking Turkish banks and companies to a system used in Russia for clearing banking payments.
It said Turkey would also improve its banking infrastructure to allow the use of Russian MIR payment cards.
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