Russia could ditch US dollar in 2-3 years – head of Russia’s #2 bank

Andrey Kostin, President – Chairman of the Board, member of the Supervisory Council, VTB Bank. (RIA Novosti/Mihail Mokrushin)

​Two to three years would be enough time for Russia to switch to international settlements to the ruble, Andrey Kostin, head of Russia’s second-biggest bank VTB, said.

“Two to three years is enough, not only to launch
[settlements in rubles], but also to complete these mechanisms.
But much will depend on how banks will cope with the task,”
Kostin said in an interview with Izvestia newspaper.

Kostin first put forward the idea of switching to national
currencies in international settlements about a decade ago, which
means a move to the ruble shouldn’t be considered a
counter-sanction measure.

“I did not find understanding in this matter with the
previous leadership of the Central Bank [10 years ago ] They
believed that since the [US] dollar works, we shouldn’t do
anything, and settlements in rubles will just bring additional
risks. Under the new leadership the position of the Central Bank
changed. I think that soon we will achieve a major
breakthrough,” Kostin said.

Creating a national payment system and establishing a domestic
rating agency are among other priorities for the bank, the VTB
head added.

SWIFT action

The media has reported on the possibility of the US and EU
widening sanctions to exclude Russia from the SWIFT global money
transfer system.

Kostin said the move would become “a point of no return”
and that any further dialogue would be impossible if SWIFT was
cut off.

“If you look at Iran’s experience, shutting down SWIFT only
happens when all relations; political, economic, cultural, even
diplomatic, break down,” the VTB boss said.

“I don’t know how [Western] banks could block SWIFT and then
expect cooperation in the fight against terrorism and nuclear
disarmament.”

However, replacing SWIFT within Russia won’t be difficult, Kostin
said.

“We have a [similar] system at the Central Bank of Russia and
others. The Central Bank has tested this system, and we can
switch to it at any moment.”

He said that domestic payments account for about 90 percent of
VTB settlements and won’t be affected. Across the entire Russian
banking system the share of domestic payments is even higher,
Kostin explained.

Article source: http://rt.com/business/191804-russia-ditch-dollar-2-years/