9 Oct 2009 20:14

No talks being held on dispensing with dollar in oil, gas settlements

CHISINAU. Oct 9 (Interfax) - No talks are being held on the possibility of switching to a currency other than the US dollar in oil and gas settlements, Deputy Russian Prime Minister Alexei Kudrin, who is also the country's finance minister, told reporters after the CIS summit in Chisinau, answering a question from an Interfax correspondent.

"I've personally not held any talks on this subject," Kudrin said.

Speculation that the dollar might be dispensed with in favor of a basket of currencies and other assets in settlements for oil triggered a sharp decline in the dollar's value this week. Britain's Independent newspaper quoted Hong Kong and Persian Gulf banking sources as saying finance ministers and central bankers had already held secret meetings to discuss this. Russian officials have denied taking part in any secret negotiations on this subject.

Central Bank Deputy Chairman Gennady Melikian told reporters the dollar's role in the global financial system was still enormous and it could not be replaced in the foreseeable future.

"There's a calm understanding that it is impossible to replace the dollar with anything else today or tomorrow," he said.

"The death of the dollar is in my view vastly exaggerated," he said. Whatever problems the dollar is going through now, it still makes up a "quarter of the world's currency [supply] and it can't be buriednot yet."

But expanding the basket of currencies in international trade should be supported, Melikian said. "You could move towards expanding the basket further. You could use the national currency [in settlements] in some countries," he said, adding that this was his personal opinion.

One example is the use of both the ruble and the yuan in cross-border trade between Russia and China, he said.