The Russian ruble has been prepared for years to take over the function of the currency of the oil trade. The problems with rupee payments show how hard it is to quit the key currency of planet trade. However, rubles and another currencies have already replaced a crucial part of the Western currencies.
When in the erstwhile article for Polish thought I wrote about India, how well they gain on Russian oil imports (Jawsniak: India gain on Russian oil | Myśl Polska (myślpolska.info), I did not rise the strategical problem of paying for Russian oil Indian rupees. India and Russia gave up a dollar in these transactions, clearing exports in rupees and rubles. This evidently helps avoid spying and pressure, but besides leads to problems that request to be solved.
Russia, erstwhile exporting oil or gas, has a immense surplus in the trade balance with India. In the first half of the year oil was delivered for $30 billion erstwhile imports from India were only 7 billion. Russian oil exporters are paid in rupees, they don't know what to do with specified amounts of currency. For rupees it is not very much what in India to buy, on the 1 hand far away, on the another hand Indian attractive goods (e.g. peculiar purpose) are unattainable due to fear of American sanctions. The Indian currency has archaic regulations that forbid it from operating abroad. It is so not liquid, easy marketable on the financial market, like dollars or euro. In order to start trading rupees on the Moscow Stock Exchange, an agreement is needed between states, and that is inactive missing.
The Russian currency is heavy overburdened, so erstwhile it had to pay 100 rubles for a dollar, 1 of the bankers pointed out as being guilty of rupees. That their deficiency of liquidity is the reason for specified a dramatic fall in the value of ruble (course 70-80 rubles per dollar is judged to be optimal for Russia). The scandal broke out, the dementation broke out, diplomatic channels confirmed: the useless rupee accounts could be invested in India's economy. This is not very joyful news for Russia, as it had previously sold oil for numbers in abroad accounts, which the West reset in 28 February ’22 and now sells oil in the currency of a friendly country, but has to invest in the Indian economy.
Russia has always had a large currency problem. With an export value of $484 billion and imports of $271 billion (2021) this 11th planet economy (and 10th exporter) had a massive surplus of $213 billion. Almost all year anyway. In today's global monetary system, she was sentenced to trade for dollars that should be purchased for real goods, and to place the money earned in dollar or western currencies, providing these economies with inexpensive capital. While these digital numbers in abroad dollar and euro accounts were illusory, Russia became convinced erstwhile they were simply stripped of them. To begin with, they were frozen not to deprive themselves of another tool of pressure, pressure, but already slow profits from this money go to Ukraine. As you can see, dollar trade has its advantages, but as you can see from Russia and its dollars (and besides the euro) – it has immense disadvantages.
In Russia, contracts have been prepared for years to change. It seemed that only this was said, due to the fact that the share of Western currencies (mainly the dollar, later the euro) was in global trade of Russia at a consistently advanced level – about 85%. The ruble accounted for only 13%. And this level hasn't changed in a fewer good years.
It seemed like it was just a game for the public, feeding the expectations of the imminent collapse of the dollar. But not only was it said, it was besides done. The full infrastructure (international, legal, banking) was prepared for what happened after February 2022. It was then that the Russian ruble and currencies of the "friendly" states began to immediately take over the place of Western currencies in the settlement of global transactions. The share of Western currencies fell from 85% to 35% in mid-year, the ruble reached 40%, and another currencies, the friendly states, took the remainder of the place. In the summer, ruble's share of export has already exceeded half the payment.
This is an evenement against the background of planet trade, where almost 60 percent of payments support dollar, over 20% – euro, and the British pound and nipponese yen complement to 90% of the world's turnover. It besides carries costs and risks. For Russia, it is simply a historical challenge whether it is capable of maneuvering among the traps of the global monetary system, and whether it does not exhaust its resources, as it did in the russian Union.
Andrzej Szczęsniak
photo public domains
Think Poland, No. 39-40 (24.09-110.2023)
