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Russia Seeks Closer Economic Ties with CIS Nations

By Vusala Abbasova December 28, 2023

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Using national currencies, rather than the US dollar, has become a long-term priority for Russia, which has been hit repeatedly with sanctions by the United States and the European Union since 2014.

Russia is looking to forge closer economic ties with other countries within the Commonwealth of Independent States (CIS) bloc, comprised of former Soviet republics, amid escalating tensions with the West.

Speaking at the informal CIS summit in St. Petersburg, Russia, on Wednesday, President Vladimir Putin signaled its commitment to expand economic cooperation within the CIS framework, with particular attention to fostering settlements in national currencies.

“We will naturally pay as close attention as possible to further strengthening of economic cooperation within the CIS framework,” TASS quoted Putin as saying. “The trade turnover among our countries demonstrated steady growth in the outgoing year. According to data for ten months, it gained two percent and stood at $83.7 bln," Putin said at the opening of the CIS informal summit.

He pointed out that an agreement on free trade in services and investment was signed among CIS member states in June, underscoring Russia's commitment to harmonize the regulatory framework between the CIS and the Eurasian Economic Union.

The Russian President outlined steps to encourage the transition to national currencies in mutual settlements, stating, “We will continue to work with our Commonwealth partners in favor of a more active transition in mutual settlements to national currencies. We are convinced that this will make it possible to more reliably ensure the economic and financial sovereignty of our states.”

The informal CIS summit brought together leaders from Azerbaijan, Armenia, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan. The talks centered on fostering member state collaboration and economic cooperation.

Using national currencies, rather than the US dollar, has become a long-term priority for Russia, which has been hit repeatedly with sanctions by the United States and the European Union since 2014. This worsened in 2022 when Russia launched what it termed a “special military operation” in Ukraine.

Consequently, Russia’s economy has operated under international sanctions for the last nine years. Since then, Russia has adopted various measures to reduce its dependence on the US dollar.

Russia has already initiated the use of national currencies in some transactions with CIS countries and within the Eurasian Economic Union. Additionally, the nation has entered into currency swap agreements with countries facing US sanctions, including China and Iran.

Founded in 1991 upon the dissolution of the Soviet Union, CIS is an organization that unites the majority of the former Soviet Union republics, including most countries in the Caspian region. To revive economic ties between countries that had once been part of the same union, most of the CIS members have created a free trade zone that has addressed a number of issues in trade relations between the member states.