28 Feb 2024 11:27

BRICS countries need own independent settlements system 'outside of politics' - Siluanov

MOSCOW. Feb 28 (Interfax) - BRICS countries need to build their own system for foreign trade settlements that would be efficient and inexpensive, as well as not dependant on political factors, Russian Finance Minister Anton Siluanov said.

"We will propose to look anew at the issue of the performance of the international monetary and financial system. We see that there is a whole range of problems, we see that the monetary and financial system is politicized, we see that international financial institutions such as the IMF and World Bank also make decisions not based on economic, but on political considerations. We see that reserve currencies today are used not to service trade turnover, but as a political cudgel, we see that clearing organizations such as Euroclear and Clearstream also work with a political tint," Siluanov told Bloomberg Saudi Arabia TV on the sidelines of a meeting of BRICS finance ministers and central bank governors in Brazil.

"Therefore, in order for BRICS countries to be able to develop normally, we need to think about creating our own financial systems independent of politics and support trade relations between our countries. Trade among BRICS countries is growing and we see that Russia is redirecting flows from the West to the East, but a good working payment system is needed, transfers and so on are needed in order for these flows to function," Siluanov said.

He said Russia, which holds the BRICS chairmanship this year, will propose "to create an independent settlement and payment system that would be based on new principles."

"These are digital principles, bockchain principles, which could be convenient for countries, not costly for making payments and would be outside of politics. We will talk about this today," Siluanov said.

Frozen assets

Commenting to reporters on U.S. Treasury Secretary Janet Yellen's call to determine how Russia's frozen assets can be used to support Ukraine, Siluanov said "this is not the first time we've heard this proposal."

"I believe that it is fundamentally wrong, destructive. Why? Because it undermines all the foundations and principles of the financial system, when the gold and forex reserves of national banks fall under some sort of political restrictions and freezes. Therefore, with this move, if it happens, our western colleagues will only make things worse for themselves, like was done in regard to restricting settlements in dollars, as was done in regard to restricting settlements in our clearing systems, settlement systems, logistics and so on. We will find a way out of this situation in any case, but these decisions undermine the foundations of the global financial system that have been built over years and decades," Siluanov said.

"How will be respond? We have ways to respond, since we also have sufficient amounts of financial assets frozen, investments of foreign investors in our securities, corporate and government, all those transfers that we are still making for foreign owners of our securities. All these decisions are misdirected, since right now we need to solve problems not with escalation but, on the contrary, solve the problem of getting out of the situation in which we now find ourselves. Therefore, if our colleagues do this we will have a symmetrical response," Siluanov said.