INTERVIEW: Unreasonable to withdraw Russian reserves from US

MOSCOW, Mar 20 (PRIME) -- Withdrawing Russian foreign exchange reserves from the U.S. and invest them in BRICS bonds is unreasonable, Russia’s Trade and Industry Chamber Director Sergei Katyrin, who will chair the BRICS Business Council from April, said in an interview to PRIME Friday.

Several deputies of the State Duma, the parliament’s lower house, asked the central bank to withdraw the reserves from the U.S. to prevent them from freezing in case of new sanctions. Some experts said the funds could be invested in BRICS countries’ bonds.

“If it were possible and productive, I think that the Finance Ministry would have already taken these steps. Nothing of the kind has been done, which means that it is unreasonable,” Katyrin said.

BRICS comprises Brazil, Russia, India, China and South Africa.

BRICS currency reserve pool will amount to U.S. $100 billion. China will contribute $41 billion to it, Brazil, India and Russia $18 billion each, and South Africa will provide $5 billion. The fund will strengthen the Russian ruble, but will not undermine the U.S. dollar, he said, adding that the pool is not aimed against current reserve currencies.

“When considering all the options, we do not try to go against anything, be that the U.S. dollar or the euro. Even the creation of a new currency is not against anything, this is just an alternative currency,” he said, pointing out that BRICS has much work to do to make their currencies convertible.

“It is not enough just to say that the yuan will be a currency tomorrow…We must ensure that a businessman wants to have the yuan in his circulation. Until this happens, no talk about the yuan or the ruble convertibility will be viable.”

BRICS needs its own rating agency in order to assess risks and advantages of the member countries in a more professional and unbiased way than western agencies, to which there are many questions, he said, adding that the agency may be based on Chinese rating agency Dagong.

“With all due respect to the existing international rating agencies…we cannot agree with current decreases of the Russian Federation’s ratings. It was understandable 20 years ago, when such decisions were made for the Russian economy after the USSR collapsed…But to grant such ratings to Russia now? There must be some deficiencies, some political bias,” he said.

He also said that the BRICS development bank, which is to be launched until the end of 2015 and in other developing countries and to which Russia is to contribute U.S. $2 billion during seven years, will not be a direct rival for the Asian Infrastructure Investment Bank (AIIB)

“There are many funds in the world, many financial institutions, and they manage with division of their areas of influence perfectly. There is competition, but it is good competition,” Katyrin said, adding that the BRICS bank is only at the first stage of its development, but there is great interest to the Chinese project and the two banks may very well cooperate in the future.

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