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Russia Turns to BRICS for Sanctions Relief in Payment Systems

As Russia is still under the thumb of Western sanctions, it’s called for the BRICS group of emerging economies (Brazil, Russia, India, China, and South Africa) to extend the use of national currencies and integrate payment systems, Reuters writes.

The sanctions have cut Russia off from the global system, as well as from almost half its gold, along with foreign exchange reserves that were at around $606 billion as of early April.

Finance minister Anton Siluanov said at a meeting with BRICS that the global economic situation had worsened substantially because of the sanctions. He added that the sanctions have also destroyed the foundation of the existing international monetary and financial system based on the U.S. dollar.

“This pushes us to the need to speed up work in the following areas: the use of national currencies for export-import operations, the integration of payment systems and cards, our own financial messaging system and the creation of an independent BRICS rating agency,” Siluanov said.

The finance minister said BRICS ministers had confirmed the importance of cooperation to help stabilize things.

Siluanov said the crisis is “man-made” and that the BRICS countries had the resources to help curb the consequences for both their own economies and the global economy as a whole.

Russia has also reportedly set up its own banking messaging system, SPFS, which is an alternative to SWIFT.

PYMNTS wrote that Russian information technology spending this year might be down as much as 39% in the wake of the sanctions.

See more: Sanctions Could Cause 39% Drop in Russian IT Spending

The report said the sanctions will cut down on IT spending by $12.1 billion, as opposed to the $31.2 billion from the previous year.

Leaders say the sanctions will likely bring about mass hardware shortages and cause difficulties while officials replace Western software with open source or locally developed alternatives.

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