Russia Must ‘Barricade’ Itself Vs. Dollar, Senior Diplomat Says

Russia must take urgent steps to cut its use of the dollar to a minimum as the new U.S. administration of Joe Biden signals it will ramp up sanctions, a top diplomat said.

“We need to barricade ourselves against the U.S. financial and economic system to eliminate dependence on this toxic source of permanent hostile actions,” Deputy Foreign Minister Sergei Ryabkov said in an interview Wednesday in Moscow. “We need to cut back the role of the dollar in any operations.”

Russia is bracing itself for the latest U.S. punitive measures over the nerve-agent poisoning and imprisonment of opposition leader Alexey Navalny. In a speech to the Munich security conference last week, Biden said that addressing “Russian recklessness and hacking into computer networks in the United States and across Europe and the world has become critical to protecting our collective security.”

The U.S. has imposed more than 90 rounds of sanctions in recent years targeting state banks and corporations, the oil and gas sector, top officials and business tycoons and is likely to add more restrictive measures, Ryabkov said.

De-Dollarization Drive

Russian President Vladimir Putin has spearheaded a drive for several years to reduce exposure to U.S. assets, pushing the share of gold in central bank reserves above dollars for the first time. Still, Russia relies on the U.S. currency for much of its international trade and overseas investors hold almost a quarter of its government debt.

The Foreign Ministry isn’t responsible for economic policy and Ryabkov didn’t elaborate on what steps might be taken to further reduce Russia’s reliance on the dollar.

Tensions with Russia’s Cold War rival have steadily grown and are now arguably even worse than at the height of the Communist era, said Ryabkov, who handles U.S. ties at the Foreign Ministry.

“There’s never been anything like it in terms of not even just a lack of trust but mutual hostility,” the diplomat said. “Emotions are running so high and we won’t see any improvement for a long, long time.”

He dismissed as “lies” U.S. assertions that sanctions would be eased if the Kremlin changes its policies.

The downturn in relations accelerated after Russia’s 2014 annexation of Crimea from Ukraine and the alleged meddling in the U.S. presidential election two years later. The Biden administration has vowed to take a tougher stance on Russia and it is considering new sanctions to punish Moscow for a major cyberattack detected last year and the Navalny case. The Kremlin denies any role in either.

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