The dollar’s status as the universal reserve currency “is becoming a problem” for the world economy, said Russian President Vladimir Putin at a press conference after the BRICS summit in South Africa.
According to him, the Kremlin “is well aware of what the dollar represents today”. “It is the universal reserve currency. To a greater or lesser degree the euro could aspire to this, but not entirely,” Putin observed.
The status of the dollar, for which there is no full-fledged substitute, is a problem, the Russian president emphasized.
According to him, Russia “will not abandon the dollar”. However, it is still “necessary to expand the possibilities of world finances and to create new reserve currencies”.
“We are not the only ones talking about this problem, and it is becoming a problem. If you think that this is Russia’s initiative, you are mistaken,” Putin assured. He added that the creation of an alternative to the dollar would make the world economy and world finances “more stable”.
“Regional reserve currencies are already appearing,” Putin said, clarifying that “in some sense the Russian ruble plays such a role for the Commonwealth of Independent States and the Eurasian Economic Community”.
“But actually every national currency is only as strong and good as the economy behind it,” the Russian president concluded.
In May, Putin said the Russian economy should be cut off from the dollar, in order to reinforce its “economic sovereignty”. He condemned the dollar’s “monopoly status”, which he claims enables the US to “parasitize” the world economy and “live beyond its means”.
Against the backdrop of Putin’s statements, the Central Bank of Russia virtually completely divested of US national debt, disposing of $79.2 billion worth of US government securities, and placing two thirds of its withdrawn funds ($48 billion) as deposits in foreign banks.
According to Putin, this was done because of the threat of sanctions.
“We see what is happening with these essentially illegal restrictions. We realize these risks and are trying to minimize them,” said Putin, as cited by Interfax.