Expanding the use of the ruble in international settlements

Abstract

The freezing of Russian assets and the continued risk of new sanctions creates incentives for abandoning the currencies of unfriendly countries and expanding the use of the ruble in cross-border settlements. In addition to prestige, the advantage of the internationalization of the national currency is the reduction of transaction costs and foreign exchange risks of foreign trade participants, which will contribute to the development of foreign trade. An increase in external demand for financial assets denominated in rubles will help increase the depth of the market and reduce the cost of borrowing. The need for additional international reserves will decrease, the storage of which may be associated with the costs of depreciating the reserve currency, obtaining negative real returns on assets denominated in reserve currencies, as well as with sanctions risks.