In May 2003, after Putin first proposed in his State of the Union address that the ruble should be fully convertible, Russia kicked off a new round of financial diplomacy aimed at the internationalization of the ruble.
In July 2006, Russia completed the revision of the Foreign Exchange Regulation and Control Law, relaxed the control of the ruble under the capital account, and made the ruble fully convertible. Since then, the Russian government has vigorously promoted its trading partners to settle bilateral trade in local currency, settle energy trade with rubles, and tried to make rubles a regional reserve currency. In the context of the international financial crisis, although the Russian economy has undergone severe tests, the Russian government has called for the establishment of a new international monetary and financial system and the increase of currencies used for international settlement with the help of diplomatic platforms such as the G-20 Summit and the BRICS Summit.
In June, 2009, President Medvedev made a speech at the St. Petersburg International Economic Forum, which clearly stated that Russia's task was to "make the ruble a more attractive, convenient and reliable means of settlement". This shows that Russia's ruble internationalization strategy has not been relaxed at all. Based on the theory of currency internationalization, this paper analyzes the measures to realize the internationalization of ruble in Russia, the status of ruble in CIS countries, the settlement of Sino-Russian trade in local currency and the prospect of ruble internationalization.
Russia has taken many positive measures to realize the internationalization of the ruble and improve its international status, and achieved some positive results.
First, realizing the full convertibility of the ruble under the capital account is the first step for Russia to implement the internationalization strategy of the ruble. Full convertibility of currency is one of the basic conditions of currency internationalization. As early as1June 1996, Russia realized the convertibility of the ruble under the current account in accordance with Article 8 of the Constitution of the International Monetary Fund. However, due to various reasons, Russia has not liberalized its control over capital projects. After 2000, with the improvement of economic situation, Russian leaders began to put the ruble fully convertible on the agenda. In May 2003, President Putin first raised this issue in his State of the Union address, and proposed a timetable for the complete convertibility of the ruble, demanding that the Russian government complete this task before 2007. In May 2006, in his State of the Union address, Putin once again called for speeding up the realization of full convertibility of the ruble. On June 13 of the same year, the Russian Central Bank announced that starting from July 1 3 of that year, Russia would completely cancel all restrictions on the free convertibility of rubles imposed after the financial crisis of 1998, loosen the restrictions on the number of rubles exchanged by Russian citizens, increase the number of rubles allowed to be taken out of the country, and allow Russian citizens to open accounts in foreign banks. On June 29th, the Russian government promulgated the draft amendment to the Law on Foreign Exchange Regulation and Supervision. The bill removes all restrictions on capital flow, including the provisions that Russian exporters must sell foreign exchange to designated banks and impose restrictions on natural persons to remit more than150,000 US dollars to external account. The complete convertibility of the ruble laid the foundation for its internationalization.
Second, promote trading partners to settle accounts in local currency in mutual trade. It is generally believed that the settlement of trade between the two countries in local currency needs to meet some conditions. First, the trade volume between the two countries is large, and the import and export scale is equivalent; Secondly, the currencies of the two countries should be convertible currencies; Thirdly, we should solve some technical problems, such as opening a bank account in the other country and avoiding exchange rate risks. Russia only settles its trade with a few neighboring countries in local currency, among which 80% of its trade with Belarus and 30%-40% of its trade with Kazakhstan are settled in local currency. In order to further expand the scope of foreign trade settlement in local currency, Russia has held negotiations with China, Venezuela and Turkey, aiming at reaching an understanding with trading partners with a certain economic foundation and cooperation history and seeking a breakthrough. In September 2009, Russia and the Central Bank of Vietnam reached an agreement on the settlement of foreign trade in local currency, but for various reasons, the two countries still use US dollars for settlement in their mutual trade. 20 10/month, during the visit of Turkish Prime Minister Erdogan to Russia, Russia and Turkey reached an understanding on the principle of local currency settlement. However, Russia did not respond to Iran's question of local currency settlement of mutual trade. Russia believes that Russia's exports to Iraq are much higher than its imports. If the two countries implement local currency settlement, Russia will hold a large amount of Iranian currency that is difficult to digest. In view of this situation, Iran proposed that Russia and Iran can consider some trade, especially energy project cooperation, and try to settle in local currency, but this issue has not yet made progress.
Promoting the settlement of trade between CIS member countries and between China and Russia in local currency is the focus of ruble's internationalization strategy. On April 1 2009, after the meeting of CIS finance ministers, economic ministers and central bank governors, Russian Finance Minister Kudrin announced that CIS member countries were studying ways to expand local currency settlement of bilateral trade. In the same year 1 1 23rd, the meeting of the Council of Heads of Government of CIS countries was held in Yalta, and the local currency settlement among member countries was discussed in detail. Governments of all countries have expressed their support for the diversification of trade settlement currencies. In mutual trade, not only US dollars can be used for settlement, but also local currency, ruble or other currencies can be used for settlement.
Third, energy importing countries are required to settle accounts in rubles in energy trade. This issue is not only related to the internationalization of the ruble, but also related to Russia's energy diplomacy. First of all, as an energy exporter, Russia has always wanted to have a certain say in the oil pricing mechanism. To this end, Putin proposed that Russia establish oil exchanges, natural gas and other products exchanges, and use rubles for pricing and settlement. On June 8, 2006, the "Russian Trading System" stock exchange officially started trading oil forward contracts. Russia has also established a special oil exchange in St. Petersburg, and hopes to build it into the fifth largest oil exchange in the world after new york, London, Singapore and Tokyo. Secondly, Russia asked its partners to price and pay for oil and gas trade in rubles. Russia is negotiating with Vietnam, Belarus, China and other countries to pay for oil and gas with rubles, and has made the same request to Moldova, Mongolia and Ukraine, but only Vietnam has agreed to the Russian proposal in principle. In addition, the Russian government also requires major oil and gas companies to price and trade in rubles in their oil and gas trade. At the end of 2008, in his first State of the Union address as president, Medvedev asked Russian enterprises to speed up the process of using rubles in oil and gas trade and use rubles in foreign economic activities in other industries. Large companies such as Natural Gas Industry Company and Luke Oil Company have repeatedly asked their partners to pay for trade in rubles, but so far few people have responded.
Fourth, promote monetary cooperation within the framework of the Commonwealth of Independent States. In order to improve the international status of the ruble and the currencies of other CIS countries, under the impetus of Russia, CIS member countries promulgated the Concept of Cooperation and Coordinated Action in the Currency Field of CIS on September 15, 2004. The document abandoned the idea of building a unified ruble zone, and proposed that each member country should build its own monetary system, payment system and foreign exchange market, thus creating conditions for financial and monetary integration. The "Concept" determines that the main objectives of monetary cooperation in CIS countries are: to achieve full convertibility of currencies; Currency enters the foreign exchange market for trading; Coordinate exchange rate policies to maintain the stability of the local currency; Establish a reliable and effective money transfer system, including the transfer of savings deposit business; Providing national treatment to economic entities and financial institutions in the field of financial services is the same as drawing up a list of restrictions on financial market access. The "Concept" proposes that in order to achieve the above objectives, measures should be taken as follows: to liberalize the domestic foreign exchange market, improve the liquidity level of the foreign exchange market, formulate adjustment rules for current account and capital account according to internationally accepted rules, and make them converge; Improve the payment and settlement mechanism, and expand the use scope and amount of local currency in payment and settlement; The prospect of convergence of exchange rate policies is to establish a cooperative mechanism to eliminate exchange rate fluctuations: choose the optimal exchange rate system, coordinate actions, and determine the range of exchange rate fluctuations; Establish a transnational structure to coordinate monetary policy, or improve existing institutions; For countries with unbalanced international payments, a joint monetary support mechanism should be established to stabilize the exchange rate and macroeconomic balance of countries with unbalanced international payments.
The Concept proposes that the above objectives will be achieved in stages. In the first stage (2004-2006), currency convertibility under the current account will be realized; In addition to hard currency, local currency can be used for settlement in CIS countries. In the second stage (2006-20 10), the monetary laws of various countries coordinated and tended to be consistent, ensuring the free circulation of capital. In the third stage (20 10-20 17 years), countries entered the stage of stable economic growth; Economic reform completed; Payment and settlement adopt modern standards; Complete the construction of customs union, establish a unified internal market, and achieve high-level coordination of economic laws and regulations. The ultimate goal is to formulate a common policy to intervene in the exchange rate, make collective decisions on monetary and financial policies, reach an agreement on the common currency, and make it an international means of payment and an international reserve currency.
Fifth, build Russia into an international financial center. The internationalization strategy of ruble is inseparable from the strategy of building an international financial center. Russian experts pointed out that building Russia's international financial center is first of all a matter of national pride and strengthening Russia's political and economic influence; Secondly, building an international financial center can create employment opportunities. For example, the securities industry in new york accounts for 23% of the city's wages, and the number of employed people accounts for 5% of the city's employed people; In addition, developed financial markets will increase investment, ensure the development of production and improve people's living standards. More importantly, building an international financial center is of great significance to the internationalization strategy of the ruble. Only when Russia becomes an international financial center can the internationalization process of the ruble make positive progress.
According to the Concept of Building an International Financial Center in Russia formulated by the Russian Ministry of Economic Development, the construction of an international financial center in Russia will be divided into two stages: the first stage will be 2008-20 10, focusing on developing the domestic securities market, realizing the integration of the domestic securities market and the regional securities market, and making the Russian financial market a local international financial center providing transnational financial services and a financial center within the CIS region. In the second stage, improve the level of competitiveness on a global scale, and make the Russian financial market become a regional financial center and an international financial center that plays a leading role in Europe and Asia. The Concept proposes that in order to achieve this goal, in addition to domestic measures such as building a good domestic financial system, cultivating a developed banking system and securities market, and reforming the tax system, it is also necessary to achieve integration with the global capital market. To this end, Russia plans to provide a simple and convenient access system for foreign investment. There are four main tasks: first, simplify the system of foreign capital entering Russia; The second is to reduce transaction costs; The third is to simplify the trading system of foreign capital; The fourth is to improve foreign exchange laws and regulations, remove those restrictions that affect Russian institutional investors' investment abroad, and reduce risks.