Armenia’s Central Bank Signs Up To Eurasian Economic Union Financial infrastructure

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Armenia’s Central Bank has signed up to the Eurasian Development Bank’s settlement infrastructure which will allow it to make payments to other members of the Eurasian Economic Union in their national currencies. The EDB said that by joining its settlement infrastructure, Armenia more closely integrates its financial structures with other members of the EAEU — Russia, Kazakhstan, Belarus, and Kyrgyzstan.

The lack of a common land border with any of the EAEU member states remains a problem for Armenia. This has resulted in a small volume of trade with other EAEU members, except Russia, thus exacerbating the country’s dependence on Russia.

Overall, the EAEU needs to consider how to best deepen integration between member states and eliminate all obstacles to trade, transportation, and technical aspects of integration as much as possible. The further development of Eurasian economic integration depends on the success of real integration on the ground, e.g., the growth of mutual trade in goods and services, cross-border investments, and labor migration. This requires both the establishment of uniform “rules of the game” among the EAEU economies and the elimination of exemptions from the common market.

Russia is the largest trading partner within the EAEU with Armenia, with exports of US$720 million of Armenian products in 2019. Armenia’s move to align itself with EAEU financial infrastructure lessens the toxic risk of using the US dollar in trade, reduces the risk of sanctions affecting trade and should result in an increase of Armenia-EAEU trade in the longer term.

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