ST. PETERSBURG
The US dollar’s monopoly will slowly end as Washington is using it for political purposes, Andrey Kostin, CEO of the Russian VTB Bank, said in a recent statement.
Kostin told Anadolu at the St. Petersburg International Economic Forum that sanctions imposed on Russia are illegitimate and the country is used to the treatment by the international community.
“Sanctions are certainly bad, but we have to work regardless,” he said.
Kostin stated that there has been a pause in sanctions on Russia during US President Donald Trump’s second term in office but Russia is “under no illusion” that the situation will change. “We have always been prepared for the sanctions to remain for a long time,” he said.
“Our strategy is working quite successfully under the sanctions and we’ve reached record profits for the past two years,” he noted, noting that the VTB Bank earned around $6.4 billion in profits last year but inflation and high policy rates negatively affected the situation.
“The Russian economy grew 4% last year but this year we expect a growth of below 2%, which is certainly not good for the economy,” he said. “The Russian ruble is strong, which is good for exporters but bad for importers.”
Kostin stated that even if Europe does not lift sanctions, the US’ steps toward lifting its sanctions would come as a significant move.
“I think this is undoubtedly true with Türkiye as well but it’s too early to talk about this — we’re monitoring the situation and hoping for the best,” he said.
BRICS’ new mechanisms
Kostin stated that BRICS recently expanded and it has become more difficult to make joint decisions with all the countries on board, and a common currency within the bloc is currently not on the agenda, but it is seeking to develop alternative mechanisms in the global financial system.
“A lot of money flows through these new large centers like China and Gulf countries but they still pass through London and New York,” he said. “Today’s digital technologies enable this to happen more efficiently and protect it from external interference — we also have to do that.”
“We face major issues in payments with Türkiye, for instance, and despite the tremendous support Türkiye provides to Russia in trade relations, and despite the over $52.2 billion trade we have, some banks are being timid — payments in national currencies can solve this problem,” he noted.
Kostin stated that US policies are affecting the US dollar and China is selling off its US bonds.
“We have to use national currencies in payments regardless of sanctions and use the opportunities we have today to make this a reality. At the same time, we should also create a new system for payment,” he said.
He noted that digital technologies, artificial intelligence (AI) and blockchain are rapidly becoming a part of daily life with applications like digital payments and digital currencies.
“This will, in the future, enable us to create a more effective and independent system — a better payment system than the US dollar or the euro,” he said, noting that the digital ruble has been on the agenda for some time in Russia.
“Trump sees the danger of the US dollar being used for political reasons, as major countries like China are reducing their investments in US Treasury bonds,” he said. “I don’t think the dollar will disappear any time soon but I see a significant decline on the horizon, or within the next decade.”
“That is why we need to create an alternative system — countries in the Global South should consider different payment methods, and I think the era of dollar monopoly will slowly come to an end this way,” he added.