Economy
Russia set to dump US dollar for FOREX
Russia is intensifying efforts to wean its economy off the US dollar as Washington considers tough new sanctions that could deny it access to foreign debt markets and cut its banks from the greenback. President Vladimir Putin has repeatedly slammed the US currency dominance on the world’s stage but the country’s previous efforts to de-dollarise its economy have so far had little success. But with Russian business circles fearing a new round of US measures over Moscow’s alleged international aggression and Washington’s trade policies becoming ever more unpredictable, authorities have now made concrete steps towards their long-standing goal. Russia’s finance ministry and the central bank are soon expected to present measures to increase the use of other currencies in international trade to Prime Minister Dmitry Medvedev. “We will certainly be moving in this direction,” Putin said last month. Not because we want to undermine the dollar but because we want to ensure our security, because they are constantly slapping sanctions against us and are simply denying us an opportunity to use the dollar.”
Observers warned that the task Russia faces is hugely ambitious but that an unpredictable US policy, new US sanctions against Iran and Washington’s trade war with China could in fact help Moscow. “Large-scale de-dollarisation will take time –- estimates range between 1.5 and five years,” Euler Hermes, a France-based credit insurance company, said in a recent report. Russia’s de-dollarisation efforts “may be easier now in a world of rising US protectionism”, it added. Euler Hermes said Russia’s transactions with the EU and China — which make up nearly 60 percent of Russia’s foreign trade — could be shifted into euros and the yuan, while transactions with former Soviet nations could be done in rubles. Putin and Chinese counterpart Xi Jinping have repeatedly said they want to increase the use of the ruble and yuan for cross-border trade.
In October, Russian authorities said they were preparing an agreement on the use of national currencies with China. According to the ING Bank, Sino-Russian trade in the ruble and yuan has already quadrupled over the past four years, although it still only amounted to around 18 percent. Deputy Prime Minister Yuri Borisov has said India will pay for Russia’s S-400 surface-to-air missile batteries in rubles. Russian Central Bank governor Elvira Nabiullina has also said she wanted to encourage banks to shift to the ruble. Russia, which has been chafing under US sanctions since 2014, has already developed its own system for financial transactions to help protect itself from a potential ban from using international bank messaging system SWIFT. Dmitry Polevoy, chief economist at sovereign wealth fund Russian Direct Investment Fund, said more active trade and transactions between countries would strengthen the de-dollarisation trend. “There has already been an organic and natural reduction of dollar payments over the years,” Polevoy told AFP.
Russia’s sovereign wealth fund has been a “pioneer” by setting up two funds with China to settle deals in national currencies, Polevoy added. “The first transactions are due in 2019. Similar investment vehicles could be created in other countries,” he said. According to the central bank’s data, the share of dollar payments in exports of goods and services declined to 68 percent from 80 percent between 2013 and 2017. At the same time, the share of transactions in euros increased to 16 percent from nine percent and those in rubles rose to 14 percent from 10 percent. The trend is less visible in imports, where the share of payments in dollars declined 36 percent from 41 percent.
Russia will not be able to fully jettison the dollar any time soon because its economy still relies heavily on oil — priced in dollars. But the country has already reduced its holdings of US government debt by around $80 billion this year. Euler Hermes said that “other measures could be the delisting of major Russian companies from foreign stock exchanges and increasing gold and euro reserves”. Oleg Kuzmin, an economist at Renaissance Capital, said there were still a lot of obstacles to using national currencies. “No one needs — for instance — the Russian ruble in Croatia and the Croatian currency in Russia,” he said. But if there’s an easy and efficient mechanism to change directly one currency into another, then this can start working properly,” he said.
The Arab Africa Trade Bridges (AATB) Program and the Federal Republic of Nigeria formalized a partnership with the signing of the AATB Membership Agreement, officially welcoming Nigeria as the Program’s newest member country. The signing ceremony took place in Abuja on the sidelines of the 5th AATB Board of Governors Meeting, hosted by the Federal Government of Nigeria.
The Membership Agreement was signed by Eng. Adeeb Y. Al Aama, the CEO of the International Islamic Trade Finance Corporation (ITFC) and AATB Program Secretary General, and H.E. Mr. Wale Edun, Minister of Finance and Coordinating Minister of the Economy, Federal Republic of Nigeria. The Agreement will provide a strategic and operational framework to support Nigeria’s efforts in trade competitiveness, promote export diversification, strengthen priority value chains, and advance capacity-building efforts in line with national development priorities. Areas of collaboration will include trade promotion, agribusiness modernization, SME development, businessmen missions, trade facilitation, logistics efficiency, and digital trade readiness.
The Honourable Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, called for deeper trade collaboration between African and Arab nations, stressing the importance of value-added Agribusiness and industrial partnerships for regional growth. Speaking in Abuja at the Agribusiness Matchmaking Forum ahead of the AATB Board of Governors Meeting, the Minister said the shifting global economy makes it essential for African and Arab nations to rely more on regional cooperation, investment and shared markets.
He highlighted projections showing Arab-Africa trade could grow by more than US$37 billion in the next three years and urged partners to prioritize value addition rather than raw commodity exports. He noted that Nigeria’s growing industrial base and upcoming National Single Window reforms will support efficiency, investment and private-sector expansion.
“This is a moment to turn opportunity into action”, he said. “By working together, we can build stronger value chains, create jobs and support prosperity across our regions”, Edun emphasized. “As African and Arab nations embark on this journey of deeper trade collaboration, the potential for growth and development is vast. With a shared vision and commitment to value-added partnerships, we can unlock new opportunities, drive economic growth, and create a brighter future for our people.”
Speaking during the event, Eng. Adeeb Y. Al Aama, Chief Executive Officer of ITFC and Secretary General of the AATB Program, stated: “We are pleased to welcome Nigeria to be part of the AATB Program. Nigeria stands as one of Africa’s most dynamic and resilient economies in Africa, with a rapidly expanding private sector and strong potential across agribusiness, energy, manufacturing, and digital industries. Through this Membership Agreement, we look forward to collaborating closely with Nigerian institutions to strengthen value chains, expand regional market access, enhance trade finance and investment opportunities, and support the country’s development priorities.”
The signing of this Agreement underscores AATB’s continued engagement with African countries and its evolving portfolio of programs supporting trade and investment. In recent years, AATB has worked on initiatives across agribusiness, textiles, logistics, digital trade, export readiness under the AfCFTA framework, and other regional initiatives such as the Common African Agro-Parks (CAAPs) Programme.
With Nigeria’s accession, the AATB Program extends it’s presence in the region and adds a key partner working toward advancing trade-led development and fostering inclusive economic growth.
Federal Executive Council (FEC) has approved the 2026–2028 Medium-Term Expenditure Framework (MTEF), a key fiscal document that outlines Nigeria’s revenue expectations, macroeconomic assumptions, and spending priorities for the next three years. The approval followed Wednesday’s FEC meeting presided over by President Bola Tinubu at the State House, Abuja. The Minister of Budget and Economic Planning, Senator Atiku Bagudu made this known after the meeting.
The Minister said the Federal Government is projecting a total revenue inflow of N34.33 trillion in 2026, including N4.98 trillion expected from government-owned enterprises. Bagudu said that the projected revenue is N6.55 trillion lower than earlier estimates, adding that federal allocations are expected to drop by about N9.4 trillion, representing a 16% decline compared to the 2025 budget.
He said that statutory transfers are expected to amount to about N3 trillion within the same fiscal year. On macroeconomic assumptions, FEC adopted an oil production benchmark of 2.6 million barrels per day (mbpd) for 2026, although a more conservative 1.8 mbpd will be used for budgeting purposes. An oil price benchmark of $64 per barrel and an exchange rate of N1,512 per dollar were also approved.
Bagudu said the exchange rate assumption reflects projections tied to economic and political developments ahead of the 2027 general elections. He said the exchange rate assumption took into account the fiscal outlook ahead of the 2027 general elections.
The minister said that all the parameters were based on macroeconomic analysis by the Budget Office and other relevant agencies. Bagudu said FEC also reviewed comments from cabinet members before approving the Medium-Term Fiscal Expenditure Ceiling (MFTEC), which sets expenditure limits. Earlier, the Senate approved the external borrowing plan of $21.5 billion presented by President Tinubu for consideration The loans, according to the Senate, were part of the MTEF and Fiscal Strategy Paper (FSP) for the 2025 budget.
The spot rate on Nigerian Treasury bills has been increased by 146 basis points by the Central Bank of Nigeria (CBN) following tight subscription levels at the main auction on Wednesday. The spot rate on Treasury bills with one-year maturity has now surpassed Nigeria’s 16.05% inflation by 145 basis points following a recent decision to keep the policy rate at 27%.
The Apex Bank came to the primary market with N700 billion Treasury bills offer size across standard tenors, including 91-day, 182-day and 364 day maturities. Details from the auction results showed that demand settled slightly above the total offers as investors began to seek higher returns on naira assets despite disinflation.
Total subscription came in at about N775 billion versus N700 billion offers floated at the main auction. The results showed rising appetite for duration as investors parked about 90% of their bids on Nigerian Treasury bills with 364 days maturity. The CBN opened N100 billion worth of 91 days bills for subscription, but the offer received underwhelming bids totalling N44.17 billion.
The CBN allotted N42.80 billion for the short-term instrument at the spot rate of 15.30%, the same as the previous auction. Total demand for 182 days Nigerian Treasury bills settled at N33.38 billion as against N150 billion that the authority pushed out for subscription. The CBN raised N30.36 billion from 182 days bills allotted to investors at the spot rate of 15.50%, the same as the previous auction.
Investors staked N697.29 billion on N450 billion in 364-day Treasury bills that was offered for subscription. The CBN raised N636.46 billion from the longest tenor at the spot rate of 17.50%, up from 16.04% at the previous auction.
-
News4 days agoNigeria to officially tag Kidnapping as Act of Terrorism as bill passes 2nd reading in Senate
-
News1 week agoFG launches fresh offensive against Trans-border crimes, irregular migration, ECOWAS biometric identity Card
-
News4 days agoNigeria champions African-Arab trade to boost agribusiness, industrial growth
-
News4 days agoFG’s plan to tax digital currencies may push traders to into underground financing—stakeholders
-
Economy4 days agoMAN cries out some operators at FTZs abusing system to detriment of local manufacturers
-
Finance1 week agoAfreximbank successfully closed its second Samurai Bond transactions, raising JPY 81.8bn or $527m
-
Uncategorized2 days agoChevron to join Nigeria oil licence auction, plans rig deployment in 2026
-
News4 days agoEU to support Nigeria’s war against insecurity