Russia and Kyrgyzstan have a trade turnover of over $5.4 billion from 2024 to 2025. Among these, over 97% of all the deals have been settled in local currencies and not the US dollar. The two countries have taken various new methods to make the ruble and som the central part of all cross-border transactions.
Russian President Vladimir Putin confirmed to have settled 97% of all transactions with Kyrgyzstan in local currencies. He revealed that both countries are finding many more options to fill in the gap. “We are working on new options for organizing mutual settlements,” to completely avoid the US dollar, he said.
Putin also revealed that Russia’s investment in Kyrgyzstan “has already reached almost $2 billion.” The US dollar remains out of the equation while local currencies take the top spot. Also, Russia and Kyrgyzstan’s relations of strategic partnership have developed successfully, said the President.
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US Dollar Phased Out, Local Currencies Rule the Roost
Not just Kyrgyzstan, Russia is settling payments in local currencies with China, Iran, and Kazakhstan, and not the US dollar. The White House sanctions are the primary cause for Russia to step aside from the US dollar. The Putin administration, with the support of China, is now convincing other countries to use local currencies.
Moreover, several countries are finding the idea lucrative as it allows their local currencies a shot in the forex markets. The US dollar, which was the dominant currency for all transactions, is now being questioned. The White House weaponizing the currency against countries that don’t fit its agenda is what led to this situation.
A reversal from here is tough, as Trump’s tariffs and trade wars have made it worse. In addition, the US dollar is seen as a main villain that’s stopping their progress and growth. Therefore, the only strategy is to uplift their local currencies and not be dependent on the US dollar.