“There is a gradual revision of the model of how central banks approach reserve accumulation”

Marcel Salikhov, president of the Institute for Energy and Finance, gave an interview to Expert magazine about international settlements and reserve currencies.

On de-dollarization trends

There is a revising of the model for how central banks approach reserve accumulation. It can be seen that the accumulation model that existed in 2000–2010 has been changed. The rapid decline in the share of the dollar at that time occurred mainly in connection with the emergence of the euro, which became the most acceptable instrument in terms of the reserves accumulation. It is clear that central banks, like other financial agents, have a desire to diversify. That is, a high share of one currency - no matter if it is the dollar or the yuan - is not very good. Therefore, there will be a desire for diversification, which will contribute to the fact that de-dollarization will continue, but for now it is premature to talk about accelerating the process.

On the growing role of the yuan and China's development model

China is actively trying to motivate and encourage its partners to trade in yuan. This is done through various channels, including through the development of infrastructure, Swift's own analogue, clearing, other activities, etc. Many have heard about the term "petroyuan" - a kind of analogue of the petrodollar. In fact, we are talking about concluding long-term contracts for the supply of oil from Saudi Arabia in yuan, and there is a counter flow of goods, equipment, and thus trade is already carried out in yuan, and not in US dollars.

China is now considering options on how to support its economic growth and stimulate exports. But one must understand that the problems of the Chinese economy are of a deep, complex nature and related to the fact that for a long time China's exports were the driving force behind growth. As the economy grows, the incomes of the population grow, it is clear that the limits of such a model are already being reached, and we need to focus on domestic demand, domestic consumption.

On the proposal to develop an infrastructure for mutual settlements in the SCO and BRICS currencies

This diversification, the gradual de-dollarization that we are discussing, is largely due to the development of financial technologies. This means that the development of the payment infrastructure depends on how quickly and cheaply payments can be made in national currencies. Now it is becoming easier and cheaper to do it directly. And if there is a reliable infrastructure that is inexpensive in terms of transaction costs, then you can trade directly. Thus, there is demand from both sides, there are counter financial flows, there are settlements, trade in national currencies. Therefore, at the level of the SCO or BRICS, it is just logical to unite and create an infrastructure with which you can diversify the global financial system.