A weak ruble is killing Eurasian integration

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According to information from business circles, held in Sochi on 14 may, the summit of the Supreme Eurasian economic Council was marked by increasing differences and contradictions between the participants. It concerns, first of all, monetary and financial issues. The main stumbling blocks of steel offered by Russia’s refusal from mutual settlements in dollars with a gradual transition to the ruble, which has caused sharp enough reaction, first of all, Kazakhstan and Belarus, as well as planned parameters of a single digital platform of the EEU.
In fact, the reaction of Minsk and Astana are absolutely natural and logical. It is worth remembering that Moscow does not agreed with its partners in the Eurasian Union, the devaluation of 2014. Astana and Minsk were just put before the fact. The modern Russian ruble is unlikely to be regarded as the currency of savings and currency for international settlements. And the main reason here – the policy pursued by the Central Bank of the Russian Federation and the Ministry of Finance of Russia. The modern Russian ruble is too volatile currency.
It’s like speculators, but, to put it mildly, not convenient for citizens and businesses. The Bank of Russia has all the tools in order to smooth out market fluctuations, recall international reserves of $460 billion, however, does not. The policy of the weak ruble easily fills the budget revenues from the export of raw materials, it is beneficial to a number of exporters, however, completely deprive the ruble of attractiveness in the eyes of international investors and actors in international trade, and ordinary Russians.
From our point of view, Moscow for Eurasian integration forget about the ruble, by analogy with the Euro, betting on a supranational currency. Germany at the time, abandoned his pride, the German brand is not lost. It will be recalled that the Eurasian Central Bank planned in Almaty. And of course, the new currency should be strong and not weak. Without this it will not be trust, there will be low inflation and low interest rates.
Now a very good moment for the emergence of a single currency in Eurasia. A trade war between the US and China could be frozen to save face for both sides of the conflict due to a consistent increase in world energy prices, which would limit the export potential of China and at the same time increase the profitability of shale oil production in the United States. Naturally, the growth in oil prices will benefit all exporting countries, including the Russian Federation and Kazakhstan. The new Eurasian currency will be raw materials, such as the canadian dollar or Norwegian Krone.
Alexander Razuvayev,
The Director of analytical Department,