US making mistake using dollar as political weapon - Putin

Published On: July 28, 2018 03:00 PM NPT By: Agencies

KREMLIN, July 28: Washington's use of payment systems for political purposes undermines the US dollar as a global currency, said Russian President Vladimir Putin at the BRICS Summit in South Africa.

"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," said Putin.

Putin added that Russia has no intention of getting rid of the US dollar, as the currency is widely used in international trade and business.

"We will continue to use the US dollar unless the United States prevents us from doing so," said Putin in his closing address to BRICS leaders on Friday.

However, the Russian president emphasized the need for other currencies in global trade and the emergence of new reserve currencies like the ruble.

Putin explained Russia's liquidation of US Treasury holding and increasing of national gold reserves as a strategy to minimize risks. 

The president’s comments came weeks after US Treasury data revealed that the Central Bank of Russia (CBR) had significantly reduced its holdings of US securities.

Russia launched a gradual sell-off of US sovereign debt in 2011, which has intensified over recent months, as Washington imposed numerous rounds of sanctions against Moscow.

So far, the Bank of Russia has slashed its holding by more than 90 percent, from over $150 billion to just $14.9 billion in May. The regulator explained the sell-off as part of Russia's strategy to diversify its reserves following a financial, economic, and geopolitical assessment.

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