Vladimir Putin seeks to dump the dollar in regional trade

Russian President Vladimir Putin has a new target in the revived cold war with Washington — the U.S. dollar.

The website Russia Today* reported Tuesday that Mr. Putin has drafted a bill to block the use of both the American greenback and the euro in trade between the bloc of countries that used to be part of the Soviet Union, including Russia, Armenia, Belarus, Kazakhstan and Tajikistan.

The measure “would help expand the use of national currencies in foreign trade payments and financial services and thus create preconditions for greater liquidity of domestic currency markets,” the Kremlin said in a statement.

The move could also prove a boost to the battered Russian ruble, which has fallen sharply in the face of Western economic sanctions over Moscow’s policies in Ukraine and over a sharp recent slide in global oil prices, Russia’s chief export money-maker.

Mr. Putin has been seeking new economic partners as trade with the West has been sharply curtailed in recent months. Russia and China have signed a major energy cooperation pact and both Beijing and Moscow have made moves to challenge the longtime dominance of the U.S. dollar as the world’s reserve currency.

Last month, according to the Russian news service RIA Novosti, Chinese banking officials launched a pilot program in Heilongjiang Province to introduce the ruble as the second currency, replacing the dollar.

The Russian president is one of the few prominent world leaders who will be on hand for the Sept. 3 parade in Beijing marking the 70th anniversary of China’s victory over Japan in World War II.

Citing rising cooperation with China on energy, transportation and space exploration, Mr. Putin told reporters in Moscow Tuesday said bilateral relations have never been better between the onetime Cold War rivals.

Despite what he called “illegitimate restrictions imposed by certain Western countries against Russia,” Russian-Chinese ties have “probably reached a peak in their entire history,” Mr. Putin said.

*The source of the report on Mr. Putin’s bill was incorrectly identified in the original story. It was first reported by www.rt.com.