What checklist a country would have before making bilateral currency exchange with Russia?

The Politicus
Apr 23, 2022 05:40 PM 0 Answers
Member Since Sep 2018
Subscribed Subscribe Not subscribe

Bilateral currency exchange like in between India or China with Russia at this moment is risky because the currencies would be pegged to Euro when the Rouble is losing value more than the former two's currencies. I want to explain this by a simple example. Russia and one of these two countries exchange currencies worth 100 million euros. Today on the date of exchange, the other country can spend it all and get commodities worth all for the day. But tomorrow as the Rouble falls, they would get less commodities of the same money. It is bad for the country unless Russia promises it will have no inflation for the month. Means tomorrow I will get the oil barrel at the same value as in today paid in Rouble.

Before arriving at a deal of bilateral currency exchange with Russia, what checklist should the countries (like India or China) have? Answers backed by real life examples are great but I equally welcome theoretical exampless like the ones I highlighted i.e spending the whole money on the same date.

0 Subscribers
Submit Answer
Please login to submit answer.
0 Answers
Sort By:

  • April 23, 2022