After the liquidation of its US Treasury holdings, surging gold reserves, and switching to a non-SWIFT payment system, Russian President Putin attempted to quell general concerns noting that “Russia isn’t abandoning the dollar."
In a press conference this morning, the Russian president said his country doesn’t plan to abandon holding reserves in U.S. dollars though he said that the risk of sanctions is prompting Russia to diversify its foreign currency assets.
“Russia isn’t abandoning the dollar,” Putin said in answer to a question about the sharp decline in its holdings of U.S. Treasuries in April and May.
“We need to minimize risks, we see what’s happening with sanctions.”
”As for our American partners and the restrictions they impose involving the dollar,” he added,
“I think that is a major strategic mistake because they’re undermining confidence in the dollar as a reserve currency.”
Putin did however caution that the US is making a big mistake if it hopes to use the dollar as a political weapon:
"Regarding our American partners placing limitations, including those on dollar transactions, I believe is a big strategic mistake. By doing so, they are undermining the trust in the dollar as a reserve currency"
In this vein, Putin added that many countries are discussing the creation of new reserve currencies, noting that China’s yuan is a potential reserve currency, but concluded:
"We will continue to use the US dollar unless the United States prevents us from doing so."
The Russian president also emphasized the need for other currencies in global trade and the emergence of new reserve currencies like the ruble.
Just last night we laid out the four major moves that Russia seems to be taking to de-dollarize so we suspect this comment by Putin is lipstick on that pig so that the rest of the world doesn't front-run him.
Additionally, President Putin said he’s ready to hold a new summit with U.S. counterpart Donald Trump in either Moscow or Washington, praising him for sticking to his election promises to improve ties with Russia.
“One of President Trump’s big pluses is that he strives to fulfill the promises he made to voters, to the American people,” Putin told a press conference at the BRICS summit in Johannesburg.
“As a rule, after the elections some leaders tend to forget what they promised the people but not Trump.”
Putin, who said he expects to meet Trump on the sidelines of the G-20