Finance Minister Anton Siluanov says the sanctions imposed after the invasion of Ukraine are destroying the basis of the existing system, which is based on the US dollar.
The Russian government has asked the BRICS group of emerging economies, which includes Brazil, China, India, Russia and South Africa, to expand the use of national currencies for import-export operations and integrate payment systems.
Following its Feb. 24 invasion of Ukraine, Russia was hit by unprecedented Western sanctions that cut it off from the global financial system and almost half of its gold and foreign exchange reserves, which totaled $606.5 billion in early April.
Meanwhile, international payment cards Visa and MasterCard ceased operations in Russia in early March, and Russia’s largest banks have also lost access to the global banking messaging system SWIFT.
Russian Finance Minister Anton Siluanov said at a ministerial meeting with BRICS on Friday that the global economic situation had deteriorated significantly due to the sanctions, his ministry said in a statement on Friday.
The punitive measures also destroy the basis of the existing international monetary and financial system based on the US dollar, Siluanov said.
“This pushes us to the need to speed up work in the following areas: the use of national currencies for export-import operations, the integration of payment systems and cards, our own financial messaging system and the creation of an independent BRICS rating agency,” said Siluanov.
Russia has set up its own banking messaging system called SPFS as an alternative to SWIFT. The own card payment system MIR was put into operation in 2015.
They were part of Moscow’s effort to develop domestic financial tools that mirror Western ones to protect the country if penalties against Moscow are widened.
The finance ministry said BRICS ministers have confirmed the importance of working together in efforts to stabilize the current economic climate.
On Friday, Russia’s central bank cut interest rates from 20 percent to 17 percent in a surprise move ahead of a regular board meeting on April 29, and said it was keeping the prospect of further cuts open at forthcoming meetings.
The cut partially reversed the emergency rate hike the bank implemented in late February after the invasion.
The central bank’s move came after Siluanov said earlier this week that his ministry was working with the central bank on measures to make the ruble’s exchange rate more predictable and less volatile.