Russia and Ethiopia are taking steps to strengthen their bilateral relations by exploring the possibility of trading in their local currencies. This move aims to cut transaction costs and economic uncertainty, paving the way for increased economic cooperation between the two nations.

The development was disclosed by Genet Teshome Jirru, Ethiopia's ambassador to Russia, in a recent interview. According to Jirru, using local currencies for trade would bring numerous advantages, including reduced transaction costs and economic uncertainty. Although the process is still in its infancy stage, both countries are convinced that it has a lot of room to grow.

The move is part of a broader effort to bolster economic cooperation between Russia and Ethiopia. The East African country is looking to improve direct coffee exports to Russia, with popular Ethiopian coffee brands like Sidamo and Harar set to become readily accessible in Russian retail establishments. In return, Russian car companies like Lada, Ural, and UAZ are considering opening manufacturing plants in Ethiopia, with Lada planning to start producing electric vehicles by the end of the year.

Furthermore, Ethiopia's government institutions and upper-middle class could be drawn to the upscale Russian brand Aurus. The two countries are also working together to build nuclear power, with plans to educate experts before beginning full-scale construction. Additionally, Russia has invested in fertilizer manufacturing, gold mining, and other vital sectors in Ethiopia.

The cooperation between Russia and Ethiopia extends beyond economic ties, with a focus on cybersecurity, intelligence exchange, and counterterrorism in the area of regional security. The Ethiopian envoy also recognized Russia's wider stabilizing influence in Africa.

Recently, Ethiopia was listed as one of the three African countries Russia added to its list of countries whose banks can now trade currencies in Russia, alongside Nigeria and Tunisia. This development is expected to help meet the Russian economy's demand for payments in its currency while improving the effectiveness of the system for direct conversion of friendly and neutral governments' national currencies.

As a member of the BRICS group of nations, Ethiopia is part of a broader effort to push toward de-dollarization and create a more centralized trading system that is less reliant on the dollar. The move is seen as a significant step in strengthening bilateral relations between Russia and Ethiopia, with far-reaching implications for economic cooperation and regional security.

In conclusion, the move towards local currency trade between Russia and Ethiopia marks a significant milestone in their bilateral relations. As both countries continue to explore ways to boost economic cooperation, the implications of this development are likely to be felt across the region, with potential benefits for trade, investment, and regional security.