‘UNFRIENDLY COUNTRIES’ MUST BUY RUSSIAN OIL AND GAS IN RUBLES, PUTIN SAYS

Wed 23 March 2022:

Russian President Vladimir Putin instructed the government on Wednesday to transfer into rubles payments for Russia’s energy resources coming from “unfriendly countries.”

Speaking at a meeting with the government in Moscow, Putin said after the US and EU sanctioned the Russian state debt in dollars and euros, which in economic terms means they announced a default on their financial liabilities to Russia, there is no longer any reason to continue to use these currencies.

“It doesn’t make sense to deliver our goods to the EU and US and receive payment in dollars and euros.

“I have decided in the shortest possible time to implement a set of measures to transfer payment – let’s start with this – for our natural gas supplied to the so-called unfriendly countries into Russian (currency), into rubles,” he said.

The president added that Russia continues and will continue to supply gas in line with volumes and prices under contract.

Initially this measure will be applied to countries listed by Russia as “unfriendly” according to a list the government issued in early March.

The Russia-Ukraine war, which began on Feb. 24, has met international outrage, with the EU, US, and UK, among others, implementing tough financial sanctions on Moscow.

Economists said the move appeared designed to try to support the ruble, which has collapsed against other currencies since Putin invaded Ukraine on Feb. 24 and Western countries responded with far-reaching sanctions against Moscow. But some analysts expressed doubt that it would work.

“Demanding payment in rubles is a curious and probably ultimately ineffective approach to attempting an end run around Western financial sanctions,’’ said Eswar Prasad, a professor of trade policy at Cornell University. “Rubles are certainly easier to come by now that the currency is collapsing. But exchanging other currencies for rubles will be quite difficult given the widespread financial sanctions imposed on Russia.

“The hope that demanding payment in rubles will increase demand for the currency and thereby prop up its value,” Prasad added, “is also a false hope given all the downward pressures on the currency.’’

SOURCE: INDEPENDENT PRESS AND NEWS AGENCIES

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