Russian President Vladimir Putin being welcomed by Prime Minister Narendra Modi ahead of 17th India-Russia annual summit meet in Goa. India has signed up for massive military purchases from Russia, including S-400 missiles and warships.(PTI File Photo)
Russian President Vladimir Putin being welcomed by Prime Minister Narendra Modi ahead of 17th India-Russia annual summit meet in Goa. India has signed up for massive military purchases from Russia, including S-400 missiles and warships.(PTI File Photo)

Russia nudges Indian policymakers to move away from the dollar

Elementary trade theory suggests currencies with the highest volume of trade and lowest transaction costs are more likely to be chosen as a preferred means for global payments.
By Zia Haq
UPDATED ON DEC 03, 2018 07:29 AM IST

To counter US President Donald Trump’s economic sanctions, snap trade wars and the dollar’s dominance in world trade, Russia is nudging Indian policymakers to explore ways to stop depending on the greenback and conduct trade in alternative currencies.

On November 29, two of the Russian Federation’s top economic advisers, Prof. Andrei Spartak and Mikhail Ershov, held a video conference with Prof. Manoj Pant (chairman of the state-run Indian Institute of Foreign Trade) and Prof. Geetanjali Natarajan (a trade expert at the Indian Institute of Public Administration) on options to “de-dollarise” the world economy.

An underlying reason behind the US’s ability to enforce sanctions and its economic agenda on a global scale has to do with the greenback’s pre-eminent status as a currency of choice for international trade. When two countries trade goods or services, they will most likely pay each other in dollars, which are then either changed back into local currency or even held in dollar reserves.

In the two-hour discussion witnessed by this correspondent, the Russians proposed to the Indian side if they could think of moving away from the dollar.

India has signed up for massive military purchases from Russia, including S-400 missiles and warships. The first payments for the ?39,000-crore missile deal will be due soon.

“The American economy is overheating and a meltdown like in 2008-09 is quite possible. So we need to be ready with alternatives (to the dollar),” Ershov said. The Russians said “de-dollarisation” was possible.

“Point is international transactions are a function of international economics. Trade is not bilateral anymore. A large part of avionics in Sukhoi comes from Israel. Will Israel accept rupees?” Pant asked. Russian-made Sukhois are India’s top-line fighter jets.

Elementary trade theory suggests currencies with the highest volume of trade and lowest transaction costs are more likely to be chosen as a preferred means for global payments. According to the data portal Statista, the US dollar’s share in global foreign exchange reserves from 2009 to 2017 stood at 64.16%.

Prof. Pant said partly the problem was created by Russia and China, too, which are now in Trump’s crosshairs. “Will China agree to not hold its reserves in dollars?” he asked. “China is not interested in dominating international politics, China wants to dominate international economics,” he said.

The Russian push reflects concerns in the Kremlin over US sanctions. The country has already embarked on a “de-dollarisation” plan. In November, it issued 1 billion euros ($1.13 billion) worth of seven-year bonds. Such treasury bonds would otherwise be issued in dollars.

Spartak heads the committee for economic integration and foreign policy activities at the Chamber of Commerce and Industry of the Russian Federation. Ershov is chief financial research officer of the Russian Institute of Energy and Finance.

“Geopolitics will play a major role for India to decide in favour or against de-dollarisation,” Nataraj said.

Ershov said Russia was not moving away from the dollar so much as the dollar was “moving away from us. He was referring to Trump’s threats to slap new sanctions, freeze Russia’s dollar-denominated assets and also target its sovereign debt.

SHARE THIS ARTICLE ON
Close
Prime Minister Narendra Modi.(PTI)
Prime Minister Narendra Modi.(PTI)

PM-led panel to commemorate 75 years of India's Independence to meet today

By hindustantimes.com, Hindustan Times, New Delhi
PUBLISHED ON MAR 08, 2021 08:52 AM IST
Here are today’s top news, analysis and opinion. Know all about the latest news and other news updates from Hindustan Times.
Close
Parliament House(HT_PRINT)
Parliament House(HT_PRINT)

Budget session LIVE: Rajya Sabha to convene at 9am

By hindustantimes.com, New Delhi
UPDATED ON MAR 08, 2021 08:53 AM IST
As the Parliament session is being held amid the Covid-19 pandemic, vaccination centres were established for the members of Parliament and their family.
The committee of 259 members is headed by Prime Minister Narendra Modi.
The committee of 259 members is headed by Prime Minister Narendra Modi.

Panel to commemorate 75 years of India's Independence to hold 1st meeting today

By hindustantimes.com | Edited by Amit Chaturvedi
PUBLISHED ON MAR 08, 2021 08:23 AM IST
The celebrations are proposed to be launched 75 weeks prior to August 15, 2022, on March 12, 2021, which is the 91st anniversary of the historic Salt Satyagraha led by Mahatma Gandhi.
Close
Representational Image. (HT file)
Representational Image. (HT file)

Light rain, thunderstorms likely over parts of NW India till Tuesday

By HT Correspondent | Edited by Smriti Sinha
PUBLISHED ON MAR 08, 2021 08:22 AM IST
Maximum temperatures are in the range of 35-39°C over most parts of the country except over Indo-Gangetic plains where temperatures are in the range of 30-32°C and over Northeast India where temperatures are in the range of 22-25°C
Close
Malls and cinema halls will be shut during the weekends while eateries and hotels have been allowed to operate at 50% of their seating capacity. (HT File photo)
Malls and cinema halls will be shut during the weekends while eateries and hotels have been allowed to operate at 50% of their seating capacity. (HT File photo)

Maharashtra’s Aurangabad in ‘partial lockdown’. Here’s a look at all curbs

By hindustantimes.com | Written by Kanishka Sarkar
PUBLISHED ON MAR 08, 2021 08:16 AM IST
The central government has also sent a high-level team to Maharashtra to review the surveillance, control and control measures in place in view of the rising cases.
Close
A nurse carries coolers with vials of the Pfizer-BioNTech vaccine against Covid-19 as elderly people are being inoculated.(AFP Photo )
A nurse carries coolers with vials of the Pfizer-BioNTech vaccine against Covid-19 as elderly people are being inoculated.(AFP Photo )

Covid-19 LIVE updates: Second round of Parliament Budget session starts today

By hindustantimes.com | Edited by Arpan Rai, New Delhi
PUBLISHED ON MAR 08, 2021 07:45 AM IST
India's vaccination drive is being conducted in full swing as 2,09,22,344 people have been inoculated so far, health ministry data on Sunday showed.
A low-intensity device exploded outside the Israel embassy on January 29.(HT Photo/Sanjeev Verma)
A low-intensity device exploded outside the Israel embassy on January 29.(HT Photo/Sanjeev Verma)

Iran guided Israeli embassy blast through local module, upsets India: Officials

PUBLISHED ON MAR 08, 2021 07:02 AM IST
The bomb that went off outside the Israeli embassy on January 29 was not a crude device. Investigators have found that it was triggered by a local module using a remote and could have been put together using the deadly PETN or ANFO. The final lab reports are awaited.
Close
A senior citizen lost his life on Tuesday in a road accident. The victim, identified as Vasudev Anandram Chijwani (65) was a resident of Kumar Prasanna society, Wanowrie.(REPRESENTATIVE PHOTO)
A senior citizen lost his life on Tuesday in a road accident. The victim, identified as Vasudev Anandram Chijwani (65) was a resident of Kumar Prasanna society, Wanowrie.(REPRESENTATIVE PHOTO)

Truck collides autorickshaw in Maharashtra; 5 killed, eight injured

PTI, Beed
PUBLISHED ON MAR 08, 2021 06:43 AM IST
All the deceased, including two children, were travelling in the autorickshaw to Beed from Wadvani tehsil when the truck rammed into it around 8 pm, a police official said.
Close
Shri Ram Janmbhoomi Teerth Kshetra Trust has been entrusted with the task of Ram temple construction in Ayodhya.(REUTERS file photo)
Shri Ram Janmbhoomi Teerth Kshetra Trust has been entrusted with the task of Ram temple construction in Ayodhya.(REUTERS file photo)

Ram Temple likely to be ready in 3 years, says Trust

ANI, New Delhi
PUBLISHED ON MAR 08, 2021 06:27 AM IST
Earlier on Saturday, Rai, had said the door-to-door collection drive for Ram temple construction in Ayodhya has stopped, but devotees who missed the contribution drive can still make their contributions through the trust website.
Close
He said that in light of recent developments, the CM had lost credibility and he is not fit to continue in power.(ANI Photo)
He said that in light of recent developments, the CM had lost credibility and he is not fit to continue in power.(ANI Photo)

Amit Shah attacks CM over gold smuggling case

By Ramesh Babu, Hindustan Times, Thiruvananthapuram
PUBLISHED ON MAR 08, 2021 03:40 AM IST
  • Addressing the concluding session of Bharatiya Janata Party (BJP) state president K Surendran’s “Vijay Yatra” in the state capital, Shah posed five questions to the CM.
Close
MK Stalin said he aspired to bring Tamil Nadu among the top three agricultural states in terms of cash crops.
MK Stalin said he aspired to bring Tamil Nadu among the top three agricultural states in terms of cash crops.

DMK finalises seat-sharing deal with seven allies in TN

By Divya Chandrababu, Hindustan Times, Trichy
PUBLISHED ON MAR 08, 2021 03:37 AM IST
  • Addressing a state conference for its cadres on the outskirts of Trichy, Stalin said a DMK government will give 1,000 every month to housewives and create a million jobs every month.
Close
Tewari, one of the 23 leaders who wrote a letter to Congress president Sonia Gandhi seeking internal reform in the party, addressed the Kerala meeting at the invitation of the Congress’s ally, Indian Union Muslim League.
Tewari, one of the 23 leaders who wrote a letter to Congress president Sonia Gandhi seeking internal reform in the party, addressed the Kerala meeting at the invitation of the Congress’s ally, Indian Union Muslim League.

After Jammu G23 meet, Tewari hits campaign

By HT Correspondent, Hindustan Tmes, New Delhi
PUBLISHED ON MAR 08, 2021 03:17 AM IST
  • The meeting came a week after Tewari and other letter writers, the group has been tagged the G23, addressed a meeting in Jammu in honour of retired MP Ghulam Nabi Azad.
Close
In Puducherry, where the party lost power weeks ago, 70 people have hit the ground with the same goal.(PTI)
In Puducherry, where the party lost power weeks ago, 70 people have hit the ground with the same goal.(PTI)

Over 300 people try to gauge mood for Cong in TN, Kerala

PUBLISHED ON MAR 08, 2021 03:12 AM IST
  • In Tamil Nadu, the Congress is in alliance with the Dravida Munnetra Kazhagham (DMK).
Close
Maharashtra, Kerala, Punjab, Karnataka, Gujarat and Tamil Nadu were identified by the Centre as the six regions that have seen a rise in new cases in the recent weeks.(REUTERS)
Maharashtra, Kerala, Punjab, Karnataka, Gujarat and Tamil Nadu were identified by the Centre as the six regions that have seen a rise in new cases in the recent weeks.(REUTERS)

6 states continue to record spike in Covid cases: Centre

By Rhythma Kaul, Hindustan Times, New Delhi
UPDATED ON MAR 08, 2021 06:04 AM IST
  • The observations from the Union health ministry come a day after the country reported the largest single-day increase in new Covid-19 infections in two months.
Close
Union minister Smriti Irani addresses a press conference, in New Delhi. (PTI)
Union minister Smriti Irani addresses a press conference, in New Delhi. (PTI)

‘Women are not pleading, they are leading’: Smriti Irani

By Vinod Sharma, Hindustan Times, New Delhi
UPDATED ON MAR 08, 2021 12:53 AM IST
  • Smriti Irani says, "I’m the only female politician who’s also recognised by her former vocation. I recognise the bias in that."
Close
SHARE
Story Saved
OPEN APP