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Euro in the world and in Russia

Euro in the world and in Russia. by Olga Butorina, Moscow State Institute of International Relations . Functions of international currency. Euro and Dollar in the world. Russia’s aims. decrease dollarization $60 bln cash

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Euro in the world and in Russia

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  1. Euro in the world and in Russia by Olga Butorina, Moscow State Institute of International Relations

  2. Functions of international currency

  3. Euro and Dollar in the world

  4. Russia’s aims • decrease dollarization $60 bln cash • diversify currency structure of foreign trade & trans-border settlements • decrease Forex risks

  5. European Union’s aims • euro - international currency • invoice currency in energy trade • euro - regional foreign currency (Europe, Mediterranean, French Africa, Russia, CIS countries)

  6. Opportunities • alternative to the dollar • deals with the rest of Europe and Mediterranean • better access to EU financial markets

  7. Challenges • rooted dollarisation • small depth of euro-ruble market • higher volatility of exchange rate (managing float – USD) • wider spreads • exports of raw materials

  8. Daily sport forex trading in Russia, 2003 (bn USD)

  9. Daily sport forex trading in Russia, 2003 (bn USD)

  10. Cash transactions in euro, monthly volumes bn EUR

  11. USD and EUR/DM cash spreads 2001-2003 (%)

  12. Daily official ratesin Oct-Dec 2003 (rubles per 1 USD and EUR)

  13. .

  14. Conclusions • Euro is good for external operations, no internal euroisation • No reasons to join EU and Eurozone • Ruble in Russia and CIS • Euro in gas trade, than – in oil • High XR volatility in future, new risk management is needed

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