Russia intends to demand payment in rubles for purchases of Russian gas from all hostile states, those that have implemented sanctions against the country and among those listed the members of the European Union, as well as the United States or the United Kingdom. This decision means going up one more step in the current geopolitical tension: the battle is not only being fought in the streets of Ukraine, it is also taking place in the markets through sanctions and decisions like this one.
This is a double edged sword. On the one hand, Russia seeks to stop the fall of the ruble and for the national currency to be used frequently for the purchase of a raw material as relevant as gas. On the other hand, it may reduce the inflow of foreign currency into the Russian economy that came via exports of raw materials (gas, oil, cereals…). The ruble rises strongly against the dollar after the decision.
Commodities such as oil, gold or gas are exchanged in the physical or futures markets almost always using the dollar, the international reserve currency in which most of the currencies are denominated. commodities. Not only that, a good part of all commercial transactions have the dollar as the exchange currency of one of the parties, which has conferred a certain historical advantage on the US when it comes to imposing certain monetary policies without generating excessive inflation in its own economy. . Now, the reign of the dollar is not as clear as in the past.
It is also true that after the embargo of all currency reserves in dollars and euros to the central bank of Russia, Moscow has seen this measure as a way to give a boost to the ruble and at the same time depend less on some currencies (euro, dollar or pound) who are at risk of a ‘corralito’ if they don’t keep away from the financial tentacles of the West.
After this new step that further distances Russia from the West, the stock markets have begun to turn downward sharply, while the price of oil has begun to rebound strongly, with Brent crude reaching over 120 dollars per barrel.
prices are maintained
At the end of a meeting with his cabinet, the Russian president indicated that the country will continue to supply gas in accordance with the volumes and prices established in the contracts, although he expressed the intention to change the currency of payment, according to the Russian agencies Interfax and Tass.
In this way, Putin would have instructed the Central Bank of Russia and its Government to determine within a week the order of operations for the acquisition of rubles in the market of the Russian Federation by those buyers of Russian gas, they assure from Europa Press.
“I ask the government to give the appropriate directive to Gazprom on the modification of existing contracts,” said the Russian president, noting that all foreign consumers should have the opportunity to carry out the necessary transactions for which a payment procedure should be created. clear and transparent for them, including the purchase of Russian rubles on the domestic foreign exchange market.
“We value our business reputation as a reliable partner and supplier. The changes will affect only the payment currency, which will be changed to Russian rubles,” he said.
On the other hand, it should be added that Putin’s personal adviser resigned today, Anatoly Chubais, who resigned and left the country on Wednesday, citing his opposition to President Vladimir Putin’s war in Ukraine. Chubais is the highest-ranking official to be cut off from Moscow over the invasion.
Known as the architect of Russia’s privatizations in the 1990sChubais gave Putin his first Kremlin job in the mid-1990s and initially welcomed his rise to power in the late 1990s.
The world turns Russia into a financial island: what happens when a country is excluded from the markets
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