Seyyed Reza Mirtaher, referring to the agreement between China and Russia to use national currencies in energy transactions, told the Strategic Council on Foreign Relations that considering the dominance of the dollar over the world’s financial system, with the complicity of European countries, the United States takes full advantage of this issue and uses this tool to put pressure on other countries, in the form of imposing sanctions, secondary sanctions, and preventing dollar transactions or punishing countries that use dollar transactions with those under sanctions.
He added that US misuse of the dollar to put pressure on other countries has long been the focus of US rival powers in the international arena and countries opposed to Western domination. For this reason, we see that with the intensification of pressure against these countries, Russia and China, in the last few years, tried to create their own special institutions for banking and financial transactions, and in the next stage, they entered a process according to which payment in commercial transactions are made in national currencies in the energy and oil sectors.
This international affairs expert said that this issue makes Moscow and Beijing safe from the damage of Washington’s secondary sanctions. This issue has now appeared in the commercial, economic, oil, energy and even weapons relations between Russia and India.
Mir Taher explained that considering the threats of the United States regarding the application of the “CATSA” law against India, these two countries reached the conclusion that they will conduct transactions between them based on rupees and rubles. The same issue has been considered even in the relations between Russia and Turkey, and on a more limited scale, negotiations between Iran and Russia have been conducted in this regard.
He stated that the purpose of all these measures is to reduce dependence on the dollar and change foreign exchange reserves from dollars to other international currencies. He added that Chinese currency appears more often in the settlement of commercial accounts and some Russian companies have started issuing bonds denominated in Yuan and a number of banks offer deposits in this currency.
“Of course, in recent days, Vladimir Putin presented a plan to reform the global financial system and suggested that many transactions be done through digital currencies. In this way, a kind of disconnection of dollar dependence will be created in commercial transactions. The widespread use of cryptocurrencies will revolutionize the international monetary system, because they are untraceable and have value.
This analyst of international issues noted that although according to figures, the amount of foreign exchange reserves of countries is decreasing, the US dollar is still used much more in global transactions. “This issue has caused the US to use this tactic in cases where its interests require it, by prohibiting dollar transactions with a certain country or imposing punishments against third parties, and it causes huge losses to the trading countries. This issue is one of the main reasons for countries turning away from the dollar and trying to replace other currencies.”
Referring to the US pressure on China to distance this country from Russia and threatening to sanction this country, Mirtaher emphasized that the US knows very well that by exerting pressure on China, it cannot prevent the expansion of relations and interactions in various fields, especially economic and commercial issues and energy with Russia.
“What Westerners are afraid of is China supplying Russia’s military and weapons needs, and the Chinese have not actually done this so far. But China and India are in no way willing to join the campaign of imposing sanctions against Russia under the pressure of the West, and the senior officials of these two countries have announced this issue many times.”
He stated that Turkey has also expressed its opposition to the imposition of sanctions against Russia, and said that due to the sharp decrease in Russian oil and gas exports to Europe, which were considered to be one of Russia’s major customers before, the Russians, considering the severe Western sanctions, and Europe’s attempt to apply new sanctions packages against them, they tried to quickly change the direction of their exports and sign big contracts with the countries of the eastern region, including China and India. We can even see that India’s oil imports from Russia have multiplied in recent months.
This analyst of international issues emphasized that these approaches show that in the new polarization of the economy and world order, the rival countries of the West are not only willing to expand the fields of interaction and trade, economic and energy exchange with each other, but also want to gradually develop the financial system. The world should be reformed and move in the direction of reducing the amount of dominance and influence of the West in it, and in return for that, by creating new mechanisms, the fields of increasing the presence and interactions between the new global powers will be provided.
Mirtaher stated that Moscow and Beijing are trying to increase the volume of trade between the two countries to 200 billion dollars and gradually remove dollar in their transactions in various areas.
He added that although it is predicted that China will become the world’s largest economy by 2030, the US still holds this position. However, for many reasons, different countries try to do their transactions using national currencies, which means less use of dollars in bilateral transactions and giving credit to the countries’ national currencies.
He said that in this context, the Chinese Yuan, Russian Ruble and Indian Rupee play an important role in trade exchanges, even between other countries that do not want to do business in US dollar. This will ultimately weaken the dollar. The war in Ukraine and the imposition of the most severe sanctions against Russia and Russia’s countermeasures, along with the huge losses suffered by European economies and the forecast of recession and inflation in European economies have caused a general decrease in the value of the euro and its exchange rate, especially in 2022.
Therefore, we are in a situation where there is less desire to use even the euro”.