Russian, Turkish Central Banks May Sign Swap Agreements to Support Ruble, Lira: Expert

ANKARA (Sputnik) - The Turkish and Russian central banks may conclude swap-agreements to support their national currencies in a bid to diversify monetary reserves, Serhat Latifoglu, a Turkish economist and hedge fund manager, said on Wednesday.

"There is a tendency to keep a significant part of savings in dollars… When central banks mutually hold national currencies, the trade in them will be strengthening and will result in a so-called dollarization destruction. It is a very big contribution. The Central Bank of Turkey should also support this step by holding rubles. Swap-agreements can be concluded. This step taken by the Russian Central Bank should be taken as an example in terms of monetary reserves diversification," Latifoglu was quoted by Turkish newspaper Aydinlik as saying.

The economist went on to say that Russia made an "important" change by adopting the policy of holding foreign currencies of its trade partners instead of storing the reserves in dollars or euros.

"We already observe the tendency of decreasing dollar presence in central banks around the world," Latifoglu was quoted by the newspaper as saying.

This approach will improve Russia's trade with countries such as China, India and Turkey, and will prevent the seizure of its reserves abroad, he added.