EAEU to create common currency | WHAT REALLY HAPPENED

EAEU to create common currency

The member states of the Eurasian Economic Union (EAEU) - Russia, Belarus, Kazakhstan, Kyrgyzstan and Armenia - may introduce a common currency into their transaction system. The Russian Finance Ministry has upheld a relevant initiative put forward by the National Payment Council, Deputy Finance Minister Alexei Moiseyev told Izvestia. The EAEU currency is supposed to be a digital one, National Payment Council Board Chairperson Alma Obayeva told the newspaper. According to her, the new payment tool will consist of payment obligations that EAEU countries owe each other concerning goods supplies. The common currency’s exchange rate will depend on the mutual exchange rates of EAEU member states’ national currencies, as well as on each country’s contribution to the Union’s overall trade, Obayeva explained. She noted that a number of big Russian banks and corporations have expressed interest in the creation of a unified means of payment. Today, a significant part of transactions within the EAEU are made in dollars, while political and economic interests of the Union’s members hinder the use of national currencies, said Leading Expert of the Center of Development Institute at the Higher School of Economics Sergei Pukhov. In particular, as the ruble’s role in the Union increases, the importance of other national currencies will decline, which will have a negative impact on those countries’ investment capabilities. That said, the creation of a common currency is an option that all parties would welcome, the expert explained. Given the risk of new sanctions, Moscow needs to pull its trade transactions out of the US Federal Reserve System’s range of influence, said Associate Professor with the Russian Presidential Academy of National Economy and Public Administration Sergei Khestanov. He did not rule out that a common currency might be created only in order to test such a tool so that EAEU countries could use it at the national level in the future. Meanwhile, the prospects for a common EAEU currency look slim as the economies and ambitions of member states are way too different, Khestanov pointed out.