Currencies, Emerging Markets, Frontier Markets

Russia To Propose Using National Currencies With Vietnam For Mutual Settlements, PM Says

Russia, VietnamRussia will propose to Vietnam the use of their national currencies for mutual settlements, primarily in trade and investment, Russian Prime Minister Dmitry Medvedev said during an interview with Vietnam’s national radio broadcaster Voice of Vietnam on Sunday.

According to the Russian PM, Russia and Vietnam could easily make the switch to their national currencies – the Russian ruble and the Vietnamese dong – in mutual settlements and it could prove to be more profitable.

More from the interview with the Voice of Vietnam:

Reporter: Is it possible, or are there any practical plans, that Russia and Vietnam will use national currencies for mutual settlements?

Dmitry Medvedev: Certainly. First, there are no obstacles to making settlements in roubles and dongs. None from the legal point of view. But we need an economic reason for this. We agreed on the possibility of using our national currencies for mutual settlements nearly ten years ago and even created a Russian-Vietnamese bank. But using national currencies is only suitable when the volume of mutual trade is high and you need to accumulate resources in roubles or dongs.

So far, these settlements only account for about 1.5 percent of trade, with all the other settlements made in US dollars, which is not always advantageous because the dollar is a foreign currency in Russia and Vietnam , and we need to buy dollars for subsequent settlements, making us heavily dependent on the exchange rate.

In this sense, it could be more profitable to make mutual settlements in our national currencies, namely in trade and investment. We are currently promoting this in mutual settlements with other partner countries. I think there is a good opportunity to do this also in relations with Vietnam .

I will definitely raise this issue at the upcoming talks with my Vietnamese partners.

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