Saudi Arabia is concerned regarding confiscating Russian monetary reserves
According to report by French Queen Tribune website, Saudi Arabia is concern about the fate of Russian monetary reserves in light of Washington’s attempts to freeze Russian assets abroad.
The report notes that the US decision to freeze these assets could have repercussions on the international monetary system, which worries Saudi Arabia.
The Financial Times reported that Saudi Arabia’s finance minister expressed concern during the recent G20 meeting, regarding the United States considering freezing Russian assets, which could significantly affect the global monetary system.
The reservations of Saudi Arabia, the Saudi OPEC group and OPEC countries have a large part of their reserves in the form of Western bonds, so freezing Russian reserves may raise concerns about the stability of this system.
Saudi Arabia has already begun reducing its US Treasuries reserves, European sources said, reflecting the Saudi Arabia’s concern.
On the other hand, Christine Lagarde, president of the European Central Bank, warns that the transition from freezing assets to confiscating them could damage the credibility of the international monetary system, especially since the freeze of Russian assets extends to the Swiss franc and the Japanese yen, not just the US dollar.
The United States moves and potential risks the US has voted on a $61 billion budget to support Ukraine, with the possibility of confiscating Russian assets.
However, Washington may face difficulties in implementing these measures without harming the international monetary system.
The United States proposes to use interest on frozen assets to finance a $50 billion loan to Ukraine, but this could lead to problems if the war ends soon and an agreement is reached with Russia on returning the assets.
The EU prefers to use the benefits to buy arms for Ukraine rather than confiscate assets entirely, to avoid damaging the euro’s reputation as an international reserve currency.
The BRICS Group and Russia’s Moves Russia is expected to respond to any asset seizure by taking countermeasures, such as the seizure of European assets held in Russia, which amount to about 105 billion Euros.
Russia is also looking to accelerate the dedollarization process in cooperation with the BRICS, as more than 30 countries seek to join the group.
However, reliance on national currencies may have its limitations, especially as some countries such as India may have difficulty exchanging goods with Russia.
The replacement of the dollar and the euro remains an outstanding issue, while gold is becoming increasingly popular as an alternative but isn’t a payment system.
Finally, the report notes that the world needs a neutral monetary system that allows all countries to participate equally.
Some argue that Bitcoin, as a stateless digital currency and an unregulated payment system, could play an important role in this new system.
