Left a dollar and lost

Miracles do not happen: if you withdraw from the currency, which is then much more expensive, you end up in the red, and much, says the economist Igor Nikolayev.

The Russian Central Bank this week released information on how the currencies is calculated in the trade of Russia with Turkey by exports and imports. The numbers who found that RBC, is very significant. Before presenting them, note that before that, the Central Bank openly published, such data are only on trade of the Russian Federation with the European Union, China, India and close partners of Moscow on the Eurasian economic Union — Belarus, Kazakhstan, Armenia and Kyrgyzstan.
Why the Central Bank was still secretive about trade with Turkey is not very clear, because after the incident with the downed su-24 for several years relations between the two countries the most that neither is a partnership. Suffice it to say that, according to Rosstat for the first half of 2019, Turkey is in sixth place (11.8 billion in dollar terms of mutual trade turnover) among the leading trade partners of Russia among the countries of “far abroad”, skipping ahead only China (50 billion), the Netherlands (25.9 billion), Germany (25.1 billion), USA (13.1 billion) and South Korea (12.7 billion).

Note that in the first half of 2018, Turkey was on the list in fourth place with 13.2 billion, that is, there is a decline in mutual trade between the two States. However, in this case it is interesting to see not only the volume of trade of Russia with foreign countries, but how’s that going, by the Russian leadership proclaimed a policy of dollarisation in international trade.

Declassified data on trade with Turkey show that the currency Russia receives for the export of the delivered the goods all the same dollar. For the first half of 2019 83.1% of all delivered Turkey Russian goods paid for with dollars and only 11.7% — in rubles. Another 5% was paid in euros. But Turkish imports to Russia are more differentiated in currency terms. Only about 40% of Turkish goods and services paid for in dollars. In rubles — about 33%, in euros — about 26%.

However, with such a major foreign economic partner of Moscow, like Beijing, the turnover is much more differentiated. For example, in the first half of 2019 in dollars was paid for Russian exports to China only by 38.8%, in EUR — by 46.4%, in rubles — by 8.5%. As you can see, the Chinese partners in mutual settlements go to Russian ruble less active than the Turks.

However, a certain momentum in what is called a de-dollarization (at least, in the trade of Russia with its foreign partners) is still observed. How this policy effective, and by whom it is held, columnist of “Rosbalt” talked with the Director of the Institute of strategic analysis Igor Nikolayev.

— How, in your opinion, was the successful attempt of the Russian leadership to pursue a policy of de-dollarization of foreign trade?

— This policy is coming and, if we evaluate it according to this criterion, it is successful.

— How serious is its scale?

— What it is, and show the data of Russia’s trade with Turkey. If we talk about its prevalence in General, it can be seen in the changing structure of international reserves of the Bank of Russia, which is very revealing. So, on March 31, 2018, the dollar’s share was 43.7%. And on the same date in 2019, this percentage decreased by almost two times and now amounts to 23.6%. The share of Euro on the contrary has increased dramatically. Similarly, sharply increased the share of RMB — 5% to 14.2%. So the process goes.

Another thing is that we are losing in terms of value. We changed the structure of their international resources, and in the spring of 2019, the dollar has strengthened. Respectively, against the dollar sagged, the Euro and even more greatly subsided yuan.

There are no miracles. If you left the currency, which then rose strongly, and invested in currencies that are much cheaper — you lose much. I recently did some calculations on this topic. So, in fact, makes for a fantastic amount. For eighteen years we have lost 16 billion in dollar terms.

— That is, it turns out that in order to stick the fork in the side of America, we are losing such huge sums?

— Well, then can always say that, say, there are also geopolitical risks — the payments in dollars are conducted through correspondent accounts in American banks! They say, do not want you to be with us has arrived, as with Iran and everything blocked? Truth in such arguments, of course. And if we reduced the share of dollars in its international reserves, these risks are reduced.

Another thing is that geopolitical risks necessary to try to minimize political means, and not with strong prestructural international reserves of Russia. This attitude cost us dearly.

— It may be objected that tomorrow, say, on the contrary Euro and the yuan may rise.

— That nobody knows — will grow or not. But it certainly shows that while we have losses, and quite serious. This is the price because this enables us to reduce these geopolitical risks for the Russian economy. You can now all try to do something different. Including analogue international transmission systems of the financial information of SWIFT. But is this an adequate price? In my opinion, no.

— As I understand it, this is similar to what happens to us and import substitution of agricultural products…

— Of course. Paying for all these anti-sanctions our people. Especially in the first stage, when it resulted in a jump in the price the Russian people paid for food additionally, many billions of rubles. Despite the fact that the quality has fallen — we have to use for a lot of money second-rate products.

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