EAEU countries may create their own monetary and financial system

TASS Russian News Agency | Oct 26, 2020 at 7:43 PM

MOSCOW, October 26. /TASS/. The countries of the Eurasian Economic Union (EAEU) may create a Eurasian monetary and financial system based on national currencies, Minister for Integration and Macroeconomics of the Eurasian Economic Commission Sergey Glazyev said on Monday.

"Russia and China have created their own payment systems, a system of electronic exchange of information between banks, but business participants are still very sluggishly using these infrastructure elements and still work using foreign currencies. I believe that we need to radically reverse the situation, create our own Eurasian monetary and financial system. It would protect us against risks and would be reliable, transparent, convenient, efficient, and would not be burdensome for the participants of economic activity," Glazyev noted.

According to him, in order to switch to settlements in national currencies, it is important to stabilize the rates of national currencies. "There is a need to sign an agreement between the EAEU states to ensure the stabilization of exchange rates, the creation of a ‘currency snake' similar to the one that worked in the countries of the European Union," Glazyev noted.

It is also important to form Eurasian exchanges and pricing mechanisms to provide participants in trade relations with advantages in settlements in national currencies, he added. In addition, Glazyev proposed not to extend currency control to settlements in national currencies and to consider issues of lending and financing of mutual trade and joint investments.

According to Glazyev, work is underway in the EAEU to switch to mutual settlements in national currencies, but still their share remains very small. About 50% within the EAEU and about 15% of settlements with China are conducted in national currencies.