Putin proposes to create a new international settlements platform and reform foreign currency rules

Vladimir Poutine. Source: a video screenshot, CNBC Television / YouTube

Russian President Vladimir Putin has spoken of plans to revamp the country’s international settlement ecosystem – in a bid to prevent Moscow from sinking into an economic quagmire at the hands of Western-imposed sanctions.

The nation was virtually shut out of international trade and the global economic system after the start of the war in Ukraine. But Moscow responded with a set of countermeasures.

According to the official Tass newspaper, Putin has created a working group to “create a new mechanism for international payments”. The group will be led by a key Putin aide, Maxim Oreshkin, and will also launch new measures related to monetary regulation, aimed at countering efforts by the international community to drag the fiat ruble into the abyss.

The group also includes a number of key government and business figures, such as the head of the central bankElvira Nabiullina, the heads of the ministries of finance and economic development, as well as the head of the Russian financial regulator and the presidents of the Federal tax service and the Federal Customs Service.

The working group was given the authority to implement state policy on monetary regulation and international settlements, and was instructed to create the necessary infrastructure for carrying out settlements “between Russia and partners from friendly countries. The platform will remove currencies such as USD and Euro, and instead require the use of “Russian rubles or national currencies” of “friendly states”.

The body will create a new protocol system for settlements with international partners and “resolve issues related to the conduct of trade finance operations” – as well as create a new payment clearing system.

The body will also create a parallel system for the roughly 50 nations the Kremlin has placed on a list of “hostile countries”. If these countries wish to trade with Russia, they will be forced to pay in rubles, rather than having the option of paying using their own national fiats.

Although the group had executive power, it was tasked with seeking Putin’s approval for all major proposals.

The task force was also tasked with “developing measures” relating to foreign exchange regulations “to ensure a balance between supply and demand in transactions” in the foreign exchange markets. And the group has been instructed to “work on a number of other” financial issues, including those relating to international sanctions and the freezing or seizure of Russian state assets held abroad.

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