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Russia To Cut Dependence On U.S. Dollar, Payment Systems

basil_hallwardAug 7, 2017, 8:07:19 PM

#Russia #USA #Dollar #Petrodollar #China #business

Russia will speed up its project to reduce dependence on the dollar and U.S. international payment systems, and intensify efforts to persuade trading neations to settle cross border transactions in the currency of the vendor nation in response to U.S. sanctions, Deputy Foreign Minister Sergei Ryabkov said on Monday.

Reuters report that Ryabkov said that "we will of course intensify work related to import substitution, reduction of dependence on U.S. payment systems, on the dollar as a settling currency and so on. It is becoming a vital need." The reason for that is that "the US is using its dominating role in the monetary and financial system to impose pressure on foreign business, including Russian companies."

While the world's mainstrewam media has been focused on Syria, Ukraine, Yemen and other trouble spots, the currency war has been simmering on the back burner for almost a decade. Three years ago the MasterCard payment system stopped serving clients of seven Russian banks without warning after Washington imposed its first set of sanctions on Moscow in 2014. In response, the Russian government ordered the creation of a national payment system. With the support of the country's banking system, China and Iran the Brics bloc created <a href="http://www.greenteethmm.com/china-reserve-currency.shtml">new systems for international trade</a> and the Mir charge card was introduced in 2015, although there is no information on what its adoption rate has been in the following years.

As <a href="http://www.zerohedge.com/news/2017-07-27/senate-overwhelmingly-votes-new-russia-sanctions-now-its-trump">Zero Hedge</a> reported late last month, part of the latest Russian sanctions imposed by the USA are restrictions on the Russian banking and energy sectors: these target Russian firms already hit by earlier rounds of santions, limiting the financing period for them to 14 and 60 days. The new law will also punish individuals for investing more than $5 million a year or $1 million at a time in Russian energy export pipeline projects or providing such enterprises with services, technology or information support, a provision that has drawn strong condemnation from Washington's European allies.

It will be interesting to discover just how the US government intends to enforce these sanctions on non - US businesses and individual foreign nations. The neo - liberals and neo - cons in Washington might cling to a deluded belief that they are still the most powerful nation militarily, but to start trying to <a href="http://www.greenteethmm.com/america-global-hegemony.shtml">impose US laws</a> on transactions conducted between sovereign nations is surely an overreach too far and will not be tolerated.

US energy companies have criticized the tightening of already existing sanctions as damaging for business and the German government has protested strongly that the US action will hit EU nations hard but have little effect on Russia. At the same time, the European Union expressed concerns the new penalties may undermine the bloc’s energy security. European Commission president Jean-Claude Juncker pledged to prepare an "adequate" response and "within days" if the measure hurt the interests of European companies. So far Europe has to elaborate on what, if any, retaliation to the sanctions it will unveil.

The joint bid by Russia, China and Iran to create an alternative to the US dollar (<a href="https://originalboggartblog.wordpress.com/world-politics/russia-ukraine-petrodollar.shtml">Petrodollar</a>) as the reserve currency, and to eventually replace it is reported throughout this page, go to our omnibus page <a href="http://www.greenteethmm.com/currency-wars.shtml">CURRENCY WARS</a> list to browse the many articles.

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