Russia ends de facto dollar peg and moves to align rouble with euro

[BrklynLiberal]

Russia said yesterday it had abandoned efforts to tie the rouble's movement closely to the dollar and switched to shadowing both the euro and the US currency.

The move heightened expectations that other countries operating de facto dollar pegs, such as China, could follow suit.

With 81 per cent of Russia's oil exports currently sold to Europe, the move also provoked fresh speculation that Russia could decide to denominate its oil in euros. Russia is the world's second-largest oil exporter, behind Saudi Arabia.

"Russia has talked about the idea of pricing its oil in euros. If it is starting to put more weight on the euro in terms of its forex regime and reserves, then that speculation will be re-ignited," said Ian Stannard, currency strategist at BNP Paribas.

Russia had announced its intention to introduce a basket arrangement last April but did not set a firm date for the change. The Bank of Russia, the central bank, has been building its euro reserves in readiness, with some 30 per cent of its reserves now estimated to be in euros, against just 5 per cent in 2000. Traders said it appeared Russia had begun to loosen its peg to the dollar in October, when the rouble began to strengthen against the dollar while the US currency fell strongly against the euro.
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http://news.ft.com/cms/s/cb1cd3e0-771b-11d9-b897-00000e2511c8.html

[Oversea Visitor]

1. There is a line of no return

bush has manage to erode the US currency role as a reserve currency.
The switch over process is slow, but it is happening and gaining momentum.

Somehow bush just dont seem to be giving a damn to all of this.

[Old Mouse]

2. Absolutely

Here it comes...