Not another dollar! Russia & Turkey agree on settlements in national currencies

Moscow and Ankara inked an agreement on using Russian rubles and Turkish lira in mutual payments and settlements, the Russian Finance Ministry announced on Tuesday.

The deal is aimed at gradually switching to using national currencies in mutual trade, the ministry said. Trade turnover between the two countries grew by 16 percent last year, reaching $25.5 billion.

According to the ministry, the agreement aims for “further expansion and strengthening of interbank interaction, as well as ensuring uninterrupted payments between business entities of the two countries.”

It envisages connecting Turkish banks and companies to the Russian analogue of the SWIFT payment network, while enhancing the infrastructure in Turkey that would allow using Russian MIR payment cards, designed by Moscow as an alternative to MasterCard and VISA.

The new agreement is part of the two nations’ push to cut their reliance on the US dollar. Turkish President Recep Tayyip Erdogan announced last year plans to end the US dollar monopoly via a new policy that is aimed at non-dollar trading with the country's international partners, including China, Russia and Ukraine.

Russia has nearly halved the share of the US dollar in trade with India and China and continued to reduce the use of the greenback in deals with the EU, sticking to its pledge to de-dollarize the economy. This year the dollar has lost the leading position in Russia’s export trade with its main trading partners.

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