Putin calls for switching more actively to sub-national currencies in mutual settlements in CIS

ArmInfo. Russian President Vladimir Putin has called for switching more actively to sub-national currencies in mutual settlements in CIS (Commonwealth of Independent States) countries, TASS reports.

"We should switch more actively to sub-national currencies in mutual settlements," Putin told a session of the Council of CIS Heads of State in the extended format.

The Russian president reminded about the agreement on free-trade zone in CIS signed in 2011. "We should use its potential to the fullest and maximally simplify conditions for movement of goods and investment flows," Putin said.

He noted that aggregate GDP of CIS countries decreased in the first quarter of 2015 as well as investment in capital stock. "Trade turnover between our countries has also decreased. In this situation, it is important to think about the package of measures on lowering dependence of national economics from foreign markets and think about reviving business ties inside the Commonwealth," he added.

Putin noted that Russia is finishing the ratification of the Agreement on CIS integrated currency market. The document was signed in Ashgabat in December 2012 by Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia and Tajikistan. "The enforcement of the document will allow us to conduct coordinated currency policy, and in the future maybe even form CIS common financial market," the Russian president said.  On August 31, Vladimir Putin submitted a draft Federal Law on Ratification of the Agreement on Cooperation in Organising an Integrated Currency Market in the CIS for consideration of the State Duma. The Russian President's website reports that the agreement contemplates direct access by the parties' resident banks to each other's domestic foreign exchange currency markets to conduct interbank FX transactions on terms more favourable than those offered to domestic commercial banks. This would help expand the use of national currencies in foreign trade payments and financial services and thus create preconditions for greater liquidity of domestic currency markets.

AmRating Armenian Rating Agency analysts say that the single currency for the countries of the EEU may be introduced not earlier than in 2020. They think introduction of the single currency conditionally called altyn will become possible only after successful integration of the EEU counties and under compulsory condition of full liquidation of the so-called waivers.  The EEU countries are seriously concerned over the big countries' measures to protect the internal market through numerous waivers from the customs regime as well as over existence of numerous technical regulations impeding development of the common market. In addition, before creating a common monetary market, it is necessary to take measures to unify the taxation and monetary policies and bring the countries to a similar macroeconomic environment.