SCO called for the increase in trade payments in national currencies

By Rhod Mackenzie

The prioritization of increasing payments in local currencies between SCO member states is crucial, this was stated by the Deputy Secretary General of the organization, Grigory Logvinov, during a press conference on Tuesday. Currently, this process has been successfully implemented at the bilateral level.

Logvinov affirmed that "the prevalent dollar-based payment system of the previous century has given way to reflections on alternative means of payment due to the destructive events occurring across the world.

He highlighted that this year, the primary focus was on upholding the SCO's roadmap to steadily raise the proportion of national currencies used in mutual trade settlements.

"While progress is being made, it's clear that the process is exceedingly challenging because, frankly speaking, the US dollar is intricately interwoven with domestic monetary systems and still remains the dominant global reserve currency," he remarked.

Logvinov highlighted that there has been an observable increase in the proportion of local currency-based settlements at the bilateral level.

"For instance, a substantial number of transactions in the Russian-Chinese commercial exchange already employ the national currencies. Potentially, the principles of the bilateral arrangements could prove valuable for the multilateral scheme," Logvinov emphasised.

The SCO, an international organisation established in 2001. It comprises India, Iran, Kazakhstan, China, Kyrgyzstan, Russia, Tajikistan, Pakistan and Uzbekistan. Afghanistan, Belarus and Mongolia are observer countries while Azerbaijan, Armenia, Cambodia, Nepal, UAE, Turkey and Sri Lanka are partner countries. The SCO summit is anticipated to convene in Astana in July 2024.