Alternative payment mechanisms in mutual trade will be discussed at the Russia-Africa summit, said VTB CEO Andrey Kostin. The weaponization of US currency has pushed many nations to look for alternatives, a top banker has said.
Alternative payment mechanisms in mutual trade will be addressed at the ongoing Russia-Africa summit, one of Russia’s top bankers said on Thursday.
Speaking to journalists on the sidelines of the event in St. Petersburg, Andrey Kostin, the CEO of Russia’s second-largest bank VTB, said that the US dollar had been weaponized, which is why nations will gradually move away from using it in trade.
“Structural changes are bound to happen. African countries are also acting on this. They have already started to create their own systems of information exchange and settlements in national currencies. This is a promising trend,” Kostin said.
“A share of trade settlements in alternative currencies will continue to increase,” he concluded.
Russia and its trade partners among the developing nations, such as fellow BRICS members Brazil, China, India, and South Africa, have started to switch to alternative currencies in mutual trade after sanctions effectively cut Moscow off from the Western financial system. A growing number of nations have expressed their support of the trend.
President Putin revealed earlier this month that over 80% of transactions between Moscow and its largest trading partner, Beijing, are settled in rubles and yuan.
Russia announced plans earlier this month to launch negotiations on the switch to national currencies with countries in the Association of Southeast Asian Nations (ASEAN), namely Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.
Russia and Africa to work for Global Dedollarization
Russia’s foreign ministry spokesperson Maria Zakharova said on Wednesday that Russia intends to work with Africa to destroy the United States dollar. Zakharova’s direct, provocative challenge to Washington and its dollar dominance, asserting that the U.S. is using the dollar for “global hegemony” and as “a means of realizing its aggression.”
De-dollarization chatter is not new. It has long been in the air, particularly in the lead-up to BRICS nations gathering in South Africa in August, with the question high on the agenda.
African leaders have already begun arriving in Russia for what is the second Russia-Africa summit since 2019, set to kick off Thursday and go through Friday. Proposals for ending the Ukraine conflict will be discussed, but also alternatives in the wake of the collapse of the United Nations-backed Black Sea Initiative grain deal.
Official delegations from #African countries are arriving to 🇷🇺 St.Petersburg to participate in the Second
Official delegations from #African countries are arriving to 🇷🇺 St.Petersburg to participate in the Second #Russia–#Africa Summit.#RussiaAfrica #Summit2023 pic.twitter.com/39O8yT0g7t
— Russian Embassy in South Africa 🇷🇺 (@EmbassyofRussia) July 26, 2023
Russian President Vladimir Putin is also hosting individual meetings with key heads of state, such as the Ethiopian and Egyptian leaders. There’s appears to a degree of disappointment given the low attendance this year, clearly a result of the Ukraine crisis and the West’s pressure campaign and sanctions against Moscow, according to a report by ZeroHedge.
The Associated Press reported that “the number of heads of states attending shrank from 43 then to 17 now because of what the Kremlin described as a crude Western pressure to discourage African nations from attending it.”
Kremlin spokesman Dmitry Peskov has said that “unconcealed brazen interference by the U.S., France, and other states through their diplomatic missions in African countries, and attempts to put pressure on the leadership of these countries in order to prevent their active participation in the forum.”
“It’s absolutely outrageous, but it will in no way prevent the success of the summit,” Peskov told reporters.