The Russian ambassador to Qatar says the two countries are seeking to use national currencies in their bilateral trade amid an accelerating wave of de-dollarization across the world.
In an interview with Russia’s RIA Novosti news agency on Monday, Dmitry Dogadkin said that works are underway to diversify away from the US greenback.
“Russia has proposed to diversify mutual trade with Qatar and switch to the use of national currencies. Work in this direction is being carried out between our relevant departments,” he said.
For decades, the US dollar has been the dominant currency in the global financial system.
In recent years, however, a de-dollarization trend has gained momentum as countries try to reduce their exposure to the risks and fluctuations associated with the American currency.
In June, during a meeting, Russian Prime Minister Mikhail Mishustin and Qatari Prime Minister and Foreign Minister Sheikh Mohammed Bin Abdulrahman Al Thani discussed using the ruble and the riyal in payments.
The announcement was made a few days after Indian Prime Minister Narendra Modi’s visit to the UAE, when the two nations inked a memorandum of understanding to create “a framework for the use of local currencies for transactions between India and the UAE,” according to the Indian central bank.
Analysis
The move by Russia and Qatar to use national currencies in bilateral trade is a significant development. It is a sign of the growing economic ties between the two countries, and it is also part of a broader trend towards de-dollarization.
The US-China trade war, the sanctions against Russia, and the escalating volatility of the global financial system are just a few of the elements that are fueling the de-dollarization trend. Countries are seeking for other currencies to utilise in trade and investment as they grow weary of the US dollar.
Aimen Jamil's intellectual curiosity lies at the intersection of Middle East and Pakistan Foreign Policy.
