Two to tango: Russia & Argentina may dump dollar in favor of local currencies in mutual trade

“We are proposing to actively join efforts not only to the Argentinians, but to our other partners as well, to switch to payments in national currencies, including the peso and the ruble. The Argentinians are still thinking,” the diplomat said in an interview with Sputnik.


The ambassador added that the euro may become an alternative to the greenback in trade between Russia and Argentina. According to Feoktistov, Argentina’s government commonly clinches contracts in dollars, that’s why the country is still not sure about rubles as an option.

'Worker and Kolkhoz Woman' sculpture © Global Look Press / Konstantin KokoshkinDollar-free monetary union: Russia-led free trade zone may adopt single currency

“But we are converting in many countries, and they will have no problems later, when converting rubles back to dollars,” the diplomat said.

Feoktistov highlighted the necessity to open a Russian bank in Argentina as well as create correspondent accounts between the country’s financial institutions. According to the ambassador, significant volume of cooperation projects in various sectors of economy may potentially assist opening a Russian bank in Argentina.

Steps towards moving cash transfers with international partners away from the US dollar have been made by several nations over the recent months. The measure is mostly triggered by US sectional policies against such countries as Iran, Cuba, Russia and others. Geopolitical and trade tensions with Washington are also forcing some countries to quit dollar transactions in favor of local currencies.

China and Russia are reportedly drafting a pact to increase the use of the ruble and the yuan in bilateral and international trade to cut reliance on the US dollar to avoid sanctions targeting financial transactions. Iran, which has recently become a target for the US unilateral sanctions, agreed to switch to national currencies in trade with South Korea, Iraq, Russia and Turkey.

Last month, a bilateral currency swap agreement worth $28.81 billion was signed between China and Indonesia. In October, China and Japan signed a multi-billion dollar currency swap arrangement, aimed at enhancing financial stability and spurring business activity in both countries. In August, Qatar and Turkey sealed a currency swap deal after Doha announced plans to invest $15 billion into Turkish markets.

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