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This vector will be continued: Novak announced the trend of switching to national currencies when paying for raw materials

Photo by Bertrand Borie on Unsplash

Russia is moving away from the use of Western currencies and virtually all payments for Russian energy resources are made in national currencies. This was said by Deputy Prime Minister Alexander Novak in an interview with journalist Pavel Zarubin in the program “Moscow. Kremlin. Putin” on Russia 1 TV channel.

“The trend has changed a lot in terms of using the dollar or the euro less. Given the current problems of settlements with these currencies, in our settlements we switch only to national currencies: the yuan is in demand here, the ruble is in demand,” Novak said.

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“This vector will continue, our colleagues are already paying for gas in yuan in the People’s Republic of China, partially for oil. They also pay in rubles. We will continue to improve these mutual settlements in national currencies, “- said Deputy Prime Minister.

Recall that since April 1, 2022,by order of the Russian President Russia began to accept payment for energy supplies to unfriendly countries only in rubles. This happened after the massive Western sanctions and partial blocking of reserves.

To complete a transaction, foreign buyers must open two special accounts at Gazprombank: a foreign currency account and a ruble account. First, the money must be transferred to the foreign currency account, and then the bank at Mosbirzha will exchange these funds into rubles and credit them to the ruble account. Immediately after that, the foreign partner will be able to transfer rubles directly to the gas seller.

In August Russia and Turkey agreed to switch to partial payment for gas in rubles. In September, the Russian side began supplying gas to China through the Power of Siberia pipeline for rubles and yuan.

Later, Vladimir Putin noted that already two-thirds of the trade turnover between Russia and China is carried out in rubles and yuan. He stressed that the use of national currencies in mutual trade is increasing.

“We are for the use of the Chinese yuan in settlements between the Russian Federation and Asian, African and Latin American countries. I am confident that these forms of payments will develop between Russian partners and their colleagues in third countries, as I already said, in yuan,” said Russian President at an extended format meeting with the President of China Xi Jinping in March 2023.

At the same time, during his address to the Federal Assembly he noted that the share of the Russian ruble in international settlements doubled as compared with December 2021, amounting to one third.

“We will keep working together with our partners to form a stable, secure system of international settlements, independent of the dollar and other Western reserve currencies which inevitably will lose their universal nature due to the policies of Western elites and rulers,” he said.

Putin also stated that Russia does not encroach on the dollar, and all countries of the world with foreign exchange reserves think about the reliability of the United States after the freezing of Russian reserves: “They themselves are cutting the branch on which they sit. I’ve said it many times: by limiting the use of the dollar, based on short-term opportunistic considerations, they are damaging themselves.

We should add that Brazilian President Lula da Silva called developing countries to abandon the dollar in international trade in favor of national currencies. Russian Foreign Minister Sergey Lavrov, commenting on this statement, noted that now the “flight from the dollar” begins: “Not very fast yet, but it will speed up”.

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