Daily Management Review

Russia is Going to Create New Currency


Russian President Vladimir Putin entrusted the government and Central Bank with solving issues about further integration in the monetary and financial spheres before September 1, says RIA News.

One of the main issues is the creation of a monetary union. This, among other things, involves the introduction of new currency for the EEU (Russia, Belarus, Kazakhstan, Armenia, and then Kyrgyzstan). There are two titles being discussed: "Altyn", the origin of which goes back to the Golden Horde, or "Euras", that would be just like the Euro. So, will the ruble soon be replace with the unified EEU currency and how will it affect Russia?

A number of former Soviet Union countries have been speaking about the creation of a unified currency for a rather long time. The question about re-establishment of one currency for Russia and Belarus was raised in the late 1990s. Later, Kazakh President Nursultan Nazarbayev has offered “Altyn” instead of the ruble for the three countries. It is interesting that a year ago the idea was supported by Vladimir Putin.

Last year, EU and US imposed sanctions against a number of sectors of the Russian economy against the backdrop of deteriorating relations with the Russian Federation in connection with the situation in Ukraine. In response, Russia has limited food imports from countries that have imposed sanctions: the US, EU Member States, Canada, Australia and Norway.

"If American companies cannot for some reason come to Russia, they can come to Kazakhstan, Armenia and Belarus and get access to the same markets," - said EEU Minister for Integration and Macroeconomics Tatiana Valovaya at the "round table" on the development of the EEU in Washington.
According to the minister, the current situation will give American companies greater awareness of the EEU member countries, which is beneficial to the development of the Union.

"Oddly enough, on this side the sanctions have a very positive impact on the Eurasian integration processes," - she added.

Valovaya also noted that the Russian response with unilateral sanctions against the West is pushing the country to the closer coordination of their actions with EEU and to the development of effective joint measures in the absence of economic borders that "no one is going to recover."

Although, she calls not to rush with the creation of a monetary union of the Eurasian Economic Union.
"I am very cautious on the issue of creating a single currency and the creation of the monetary union. First, we need to have a single market, and then talk about the possibility of a single currency. But it is necessary to coordinate monetary policy - "- said the Minister.

January 1, 2015 an agreement on the establishment of the Eurasian Economic Union came into force. According to the document, free movement of goods, services, capital and labor is ensured in the EEU. The participating countries also agreed to carry out a coordinated, coherent and unified policy in the various sectors of the economy.