Russia is planning to abandon the US dollar in favor of euro and rubles for currency settlements in global energy transactions in order to minimize reliance on the American currency.

“We have a very good currency, it’s stable. Why not use it for global transactions?” Economy Minister Maxim Oreshkin said in an interview with the Financial Times on Sunday. The minister noted that the only question is whether switching from the US dollar would lead to any excessive costs.

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“We want [oil and gas sales] in rubles at some point. The question here is not to have any excessive costs from doing it that way, but if the broad… financial infrastructure is created, if the initial costs are very low, then why not?” the minister stated. He added that Russia will be able to sell its energy exports in local currency, given the popularity of the country’s domestic bonds among foreign investors, who own roughly 29 percent of its ruble debt.

Last month, Russia also announced that it will no longer take out loans in US dollars for the remainder of 2019 and the whole of 2020, turning instead to the yuan and euro.

“We will borrow in currencies other than the dollar,” Russian Finance Minister Anton Siluanov said at the time.

Also in September, Russia’s largest oil company Rosneft set the euro instead of the dollar as the default currency for all new exports of crude oil and refined products.

In general, throughout 2018 and 2019, Russia has been steadily decreasing the US currency share of its international reserves, opting instead to increase gold, yuan and euro holdings, recent data from the country’s central bank showed. The dollar share halved from 43.7 percent to 23.6 percent in the 12 months from March 2018, the Central Bank of Russia (CBR) said in a report released earlier this month.

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All these moves come as Russia is trying to reduce its dependence on the greenback through the “de-dollarization” policy, partly in order to offset the impact of US sanctions on the country’s economy following the reunification with Crimea back in 2014 and allegations of interfering in the 2016 US presidential elections. In August this year, Washington also banned its banks from buying sovereign Eurobonds directly from Russia. Russia’s Finance Ministry replied that the country will shift its focus to selling debt to investors from Asia and Europe instead.

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