Syria to repay debt to Russia in euros - government

[bemildred]

MOSCOW. Jan 17 (Interfax) - Syria will repay its Soviet era debt to Russia in euros, the Russian government said on Thursday.

The government approved a draft law "On the Ratification of the Intergovernmental Agreement on the Repayment of Former Soviet Loans of May 29, 2005, and the Addendum to the Agreement of January 17, 2007."

Syria informed Russia in early 2006 that it wished to conduct international banking transactions in euros and offered to sign intergovernmental agreements to that effect. Syria explained the decision by the possible freezing of its accounts in U.S. dollars, because of U.S. economic sanctions.

The addendum stipulates the switch from dollars to euros in bilateral settlements. The annual transfers by Syria to the Russian federal budget are equivalent to $150 million.

http://www.interfax.ru/e/B/finances/26.html?id_issue=11947377

[Zywiec]

1. why not in Rubles? n/t

[happyslug]

2. Not an international domination

and given the devaluations during the Yelsin years, not worth much today.

[DrDebug]

3. The ruble is currently doing significantly better than the US dollar

The ruble was pegged to the dollar until the beginning of 2005 when it became a floating currency because it was doing a lot better. ( http://www.vu.union.edu/~coulombj/Articles/ECONOMY/Russia%20ends%20de%20facto%20dollar%20peg%20and%20moves%20to%20align%20rouble%20with%20euro/index.html )



http://www.exchangerate.com/cgi-images/chart_image.cgi?hmd=31104000&cu=239&country=192

The real irony is that Belarus wanted a monetary union with Russia, however Belarus is the last real communist country and their ruble could not be pegged first. The Belarus ruble is pegged to the dollar though and has a very stable exchange rate, so George W. Bush's free trade economy performs on the same level as pre-Gorbachev communism... :sarcasm:

[happyslug]

4. but these were in the Rubles of the 1990s, not today's rubles.

Basically pre-1997 1000 Rubles equal 1 post 1997 Ruble, then you had ANOTHER 70% devaluation. Only in the last year of Yeltsin rule did the Ruble Stabilized and became the Currency it is now. On the other hand the contracts signed pre-1997 were ALL priced in pre-1997 Rubles, now worthless. Thus the switch to EUROS.

For more on the Ruble:
http://en.wikipedia.org/wiki/Russian_ruble