Russia wants to free up BRICS foreign exchange reserves - governor

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This content was produced in Russia where the law restricts coverage of Russian military operations in Ukraine

- Russia wants the BRICS group of developing nations to agree on the possibility of countries experiencing balance of payments pressure to use the bloc's foreign exchange reserves, Central Bank Governor Elvira Nabiullina said on Tuesday.

Russia's current account surplus shrank almost 80% to $50.2 billion in 2023 as export revenues dropped and Moscow has lost access to around half of its foreign currency reserves, with about $300 billion frozen in Western countries.

The BRICS bloc comprises Brazil, Russia, India, China and South Africa, but a handful of other nations were invited to join from this year. Russia is BRICS chair for 2024.

In an interview with the RIA news agency, Nabiullina said BRICS central banks would focus more on settlements in national currencies in 2024, creating payment infrastructure free from influence from Western sanctions.

Major Russian banks were disconnected from the SWIFT global payments system soon after Moscow despatched troops to Ukraine in February 2022, as the West sought to cripple Russia's financial sector.

Nabiullina said a pool of $100 billion in foreign exchange reserves of BRICS countries could be used to support participating countries if needed.

"We have been testing it annually since 2018 to keep it in constant readiness, but so far none of our countries has used it, there was no need for it," RIA quoted Nabiullina as saying.

"This year we want to finalise negotiations so that countries, if they experience balance of payments pressure, can receive funds from this pool in national currencies."

The latest round of U.S. sanctions in December has made cross-border settlements with many countries more complicated because the risk of secondary sanctions has increased, Nabiullina said.

"It is time to activate efforts on creating alternative forms of payment," Nabiullina said. "Businesses in all these countries is working on this."

(Reporting by Elena Fabrichnaya and Alexander Marrow, editing by Ed Osmond)


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