Russia could ditch US dollar in 2-3 years – head of Russia's #2 bank
Two
to three years would be enough time for Russia to switch to
international settlements to the ruble, Andrey Kostin, head of Russia’s
second-biggest bank VTB, said.
“Two
to three years is enough, not only to launch [settlements in rubles],
but also to complete these mechanisms. But much will depend on how banks
will cope with the task,” Kostin said in an interview with Izvestia newspaper.
Kostin
first put forward the idea of switching to national currencies in
international settlements about a decade ago, which means a move to the
ruble shouldn’t be considered a counter-sanction measure.
"I
did not find understanding in this matter with the previous leadership
of the Central Bank [10 years ago ] They believed that since the [US]
dollar works, we shouldn’t do anything, and settlements in rubles will
just bring additional risks. Under the new leadership the position of
the Central Bank changed. I think that soon we will achieve a major
breakthrough,” Kostin said.
Creating
a national payment system and establishing a domestic rating agency are
among other priorities for the bank, the VTB head added.
SWIFT action
The
media has reported on the possibility of the US and EU widening
sanctions to exclude Russia from the SWIFT global money transfer system.
Kostin said the move would become “a point of no return” and that any further dialogue would be impossible if SWIFT was cut off.
“If
you look at Iran’s experience, shutting down SWIFT only happens when
all relations; political, economic, cultural, even diplomatic, break
down,” the VTB boss said.
“I
don’t know how [Western] banks could block SWIFT and then expect
cooperation in the fight against terrorism and nuclear disarmament.”
However, replacing SWIFT within Russia won’t be difficult, Kostin said.
“We
have a [similar] system at the Central Bank of Russia and others. The
Central Bank has tested this system, and we can switch to it at any
moment.”
He
said that domestic payments account for about 90 percent of VTB
settlements and won’t be affected. Across the entire Russian banking
system the share of domestic payments is even higher, Kostin explained.
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