The U.S. dollar climbed higher on Friday, making a recovery from a near-15-month low after the closely watched U.S. jobs report came in ahead of forecasts, which suggests the Fed will tighten its balance sheet.
The ICE Dollar Index which compares the buck with a trade-weighted basket of 6 currencies, added 0.8% to 93.58, its largest intraday percentage move since January 18. During the session, it traded around 92.70, which was its lowest since May 2016. The WSJ Dollar Index which measures the currency a broader basket of 16 rivals, rose 0.6% to settle the day at 86.39, also trimming an earlier loss.
As soon as the Russians decide to reject the US dollar, this currency will be seriously affected. In addition, the countries of the Commonwealth of Independent States will support Russia, Rossiyskiy Dialog reported.
Economists remember that most of the US currency is outside the US. If Russia and the CIS refuse to conduct operations in dollars, this will provoke a chain reaction and this policy will also join China and other Asian countries.
Experts then point out that US sanctions against Russia may lead to the dollar disappearing from Russia and giving way to an alternative currency.
The latest economic trends show that China and Russia are gradually reimbursing all national debts, discarding dollar reserves. Among the measures to contribute to the financial independence of these countries, the most ambitious project so far is the New Development Bank (NDB) of the BRICS group (Brazil, Russia, India, China And South Africa).
The NDB, based in Shanghai, was created by the BRICS in July 2014 to finance infrastructure and sustainable development projects in member countries and other developing nations.
In April 2016, the Bank’s Board of Directors approved seven projects with funding of more than 1.5 billion dollars.
In addition, as of July 1, 2017, all Russian banks are required to accept payments made through the Russian national payment system, Mir. In this way, Russian programmers opted to create the algorithms ‘from scratch’, guided by established international standards for payment systems.
Another important advantage is the independence of the system from any external factor. The system uses Russian software, and the technological and communication infrastructure is isolated from any effect of sanctions.