Russian Prime Minister Dmitry Medvedev has recently surprised the international business community by saying that the Russian ruble could become an international reserve currency in the near future. The current situation in the global economy suggests such a development. Experts tried to figure out to which extent it was possible and what the move could bring to Russia.
Historically, the U.S. dollar became the main reserve currency for the entire postwar period (during 1945-1980). Only after the establishment of the European Monetary System in 1979, with the mechanism of joint circulation of European currencies on the foreign exchange market, a second key currency emerged – the German Mark. However, its share in international operations did not exceed 30 percent.
The introduction of the euro did not significantly change the balance of power between the key currencies. According to the Bank for International Settlements, the share of U.S. dollar in foreign exchange transactions has not changed in the last decade and made up about 85-90 percent, analysts of News Forexsaid. Today, the major currencies playing the role of reserve currencies, are the U.S. dollar, the euro, the Japanese yen, the British pound sterling and the Swiss franc. They are used to conduct and serve trade operations, ensure the global movement of capital, express prices in foreign trade transactions and in exchange rates and to ensure the mechanisms of currency interventions.
Russia, in fact, can get a lot of advantages, for example, an opportunity to get cheap and unlimited crediting of the national economy due to the accumulation of reserves in other countries in this currency; to purchase large quantities of goods and services on foreign markets to avoid the chronic deficit of the balance of payments.
Russia would become a world power, and its finances would be equated to gold. The ruble would thus be in demand abroad. This would make international settlement much simpler. In any case, if the Russian ruble becomes a reserve currency in the world, Russia will obtain the superpower’s status with all pros and cons that go with it.
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