Western sanctions hit world economy

BRICS Plus countries must boost cooperation

Facing Western sanctions, Moscow first asked "unfriendly" economies to settle the payments for Russian natural gas supplies in rubles. After that, Russian President Vladimir Putin signed a law banning the placement and circulation of depository receipts for shares of Russian issuers of foreign stock exchanges.

These "counter-sanctions" by Russia are affecting European countries as they are highly dependent on Russian oil and gas. The ruble payment system could help stabilize the Russian currency's exchange rate, prevent large-scale placement of rubles in foreign exchange and stock markets, weaken the effects of the Western sanctions and help diversify the global monetary system.

Although this won't change the dominant status of the US dollar and the euro as international currencies, it will weaken the hegemony of the greenback, for it would prompt people to think about the risks associated with the US dollar and other currency assets.

Facing new changes in the international financial system, BRICS-Plus countries (Brazil, Russia, India, China and South Africa plus Indonesia, Turkey, Mexico, Malaysia and Iran) should work together to work out an effective way of settling cross-border payments.

They also need to strengthen cooperation with other economies. And since countries are likely to focus more on national security, domestic circulation and regional cooperation, the original multilateral order could change to a certain extent.

Zong Liang, chief researcher of the Bank of China and a senior fellow with CBGG.

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