It is known as the Petrodollar. The sale of oil worldwide has been pegged to the US Dollar since the days of Richard Nixon and Henry Kissinger in the early 1970s. The status of the US dollar as the world’s reserve currency is dependent on the US-Saudi Arabia deal negotiated by Kissinger to link oil to the dollar. Today, the Petrodollar is in trouble. According to the Wall Street Journal, Saudi Arabia and China are in active discussions to price some Saudi oil exports in Chinese Yuan.
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Dollar & Euro Torpedo: China-Eurasia Create New Currency and Financial System – India “YES” to Russia
India-Russia transactions in national currencies
Article writer: Vassilis Kapoulas
US-EU sanctions have sparked global developments as the dollar begins to lose ground. China-Russia are planning a new currency and financial system that will include all Eurasian countries.
The most dangerous development for the US and NATO is heard in the name of India as New Delhi approaches Russia for transactions in national currencies and even Yuan.
If the West loses India then it is 100% a given that it will lose the new Cold War that is being created.
Agreement on a new currency and financial system
The Eurasian Economic Union (EAEU) and China have reportedly agreed to develop a blueprint for a new international financial system based on a new currency.
This was agreed by the participants in the economic dialogue “A new stage of monetary, financial and economic cooperation between the Eurasian Economic Union and the People’s Republic of China. Global Transformations: Challenges and Solutions “, which took place on March 11.
“Given the common challenges and risks associated with the global economic downturn and the restrictive measures against the EUSR and China, our countries should intensify practical cooperation both at the level of regular expert dialogues and in the field of joint measures. and projects “ said the Minister of Integration and Macroeconomics of the Eurasian Economic Union Sergei Glaziyev.
Wang Wen, Dean of the RDCY Institute of Economics, stressed the convergence of the positions of the EAEU countries and China on many issues of the global development agenda and expressed his support for the intensification of the Eurasian-Chinese dialogue.
As a result of the discussion, it was decided to develop an independent international monetary and financial system.
This is supposed to be based on a new international currency, which will be calculated as an indicator of the participating countries’ national currencies and commodity prices. The first draft will be submitted for discussion by the end of March.
India-Russia transactions in national currencies
“India and Russia, which have been hit by sanctions, are exploring the possibility of using the Chinese yuan as a reference currency for the valuation of the rupee-ruble trade mechanism,” said two Indian government officials.
The two countries are considering a floating rate deal as India, the world’s third-largest oil importer, plans to buy lower-rate oil from Russia to ease inflationary pressures.
To strengthen the oil market from Russia, India is working to address key issues, including ship availability, insurance coverage for imports and oil mixes, given the configuration of Indian refineries.
This is important given the Western sanctions on Russia and PJSC Rosneft Oil Co., as Indian companies can acquire stakes in Russian projects and buy Russian crude oil.
The production cost per unit of Rosneft is considered one of the lowest in the world.
“The rupee-ruble trade is on paper. “We are working on a monetary agreement to facilitate trade, as we also plan to increase the purchase of oil from Russia,” said one of the two Indian government officials, speaking on condition of anonymity.
The rupee-ruble trading mechanism will allow Indian exporters to be paid in rupees for their exports to Russia instead of dollars or euros.
Under the agreement, a Russian bank is required to open an account with an Indian bank, while an Indian bank opens an account in Russia.
And third coin: The Yuan
“We can see a system of floating exchange rates. “A third coin can be taken as a reference point, maybe the yuan,” said the same Indian official. He added that the agreement would not require the exchange rate to be pegged to any currency, especially as the ruble depreciates. The ruble has fallen as much as 39% against the dollar this year.
The local currency trade mechanism is the key to resuming trade with Moscow, as India buys many weapons systems and nuclear products from Russia, while India exports pharmaceutical, mechanical and agricultural items.
Meanwhile, the Reserve Bank of India is consulting banks, including UCO Bank, to appoint a third party to facilitate payments. UCO Bank acted as an intermediary when sanctions were imposed on Iran.
Under the monetary agreement, the Russian currency will be converted into rupees at a fixed exchange rate and the money will be deposited in an Indian bank account.
Russia will use yuan from its foreign exchange reserves
“Russia will use the Chinese yuan from its foreign exchange reserves, as Western sanctions prevent Moscow from gaining access to 300 billion US dollars and euros in reserves,” said Russian Finance Minister Anton Siluanov.
The Russian Ministry of Finance stressed that ” the Ministry of Finance will order the payment of a coupon for the issuance of government Eurobonds that expires on Wednesday in foreign currency, but the payment could alternatively be made in rubles if the request for forex payment is rejected by Western banks.
From Russia’s point of view, paying a Eurobond voucher in rubles would still mean that the government is meeting its foreign debt obligations, Siluanov added.