GeorgiyBovt writes that the notion flies in the face of economic reality.
Ukraine Crisis: Russia Cannot Dispense with the Dollar (Komsomolskaya
"There has been discussion about whether we could punish
America by refusing to settle bills and accounts in dollars by using rubles instead,
and by selling off 'enemy' American bonds. ... As for transitioning to payments
in rubles for our exports (in particular energy exports), if we were to stand
on principle, we would be 'cutting off our nose to spite Uncle Sam's face.' ...
The results of our own actions would surpass the most malicious intentions of
those now preparing economic sanctions against our country."
We're not being childishly over-excited.
The West's new sanctions threaten everyone. Of course, we must respond to them
as best we can. Our constant refrain, "If you don't pay we'll cut off the gas,"
remains. The heightened tension, however, doesn't mean that we should take
leave of common sense and make panicky decisions that would more than likely
lead to "shooting ourselves in the foot," rather than reasonable
measures for minimizing the impact of any new sanctions against us.
Recently, for instance, there has been
discussion about whether we could punish America by refusing to settle bills
and accounts in dollars by using rubles instead, and by selling off "enemy"
American bonds. We Russians currently possess around 1 percent of all U.S.
treasury bonds (amounting what seems to us the enormous sum of $160 billion).
Whatever we do with them would be like a mosquito bite - a scratch that they
barely even feel. Just as they wouldn't feel our "crushing” exit from the
dollar or the conversion of our foreign reserves into yuan
(which, remember, is not freely convertible). Our entire gold reserves are many
times smaller than the amount of currency trading worldwide every day.
As for transitioning to payments in
rubles for our exports (in particular energy exports), if we were to stand on
principle, we would be "cutting off our nose to spite Uncle Sam's face." It
would mean that buyers would first have to go to the currency markets and buy our
rubles, then open a checking account at a Russian bank. If oil and gas were
only to be found in our country, then we could get away with dictating in such monopolist
terms. The oil market today, however, is a buyer's market, and the gas market
is rapidly becoming one, too. Buyers wouldn't tolerate the caprices of such a seller,
and would go elsewhere.
As for the "prohibition" of
the dollar in this country, irresponsible legislative initiatives like this, which
is being called "merely” a serious discussion about how people should wean
themselves from the dollar, will result in a growing suspicion on the part of
citizens of financial and economic institutions of government, lead to an
outflow of deposits from banks (if in the beginning of the year, we saw an
increase in currency and cash deposits, not stopping this dangerous talk will
result in huge withdrawals of these funds to be turned into cash and stuffed
into mattresses) - and to a general bank panic. In the long term, this would
lead to guaranteed growth in the black currency market, and a major
destabilization of the financial sector. The results of our own actions would
surpass the most malicious intentions of those now preparing economic sanctions
against our country. There is no need to tempt economic reality. To do so can
and will end badly.