Measure to prevent Russia from being ‘robbed’ of dollar and euro payments, Kremlin spokesman says
According to Dmitry Peskov, press secretary to President Vladimir Putin, Moscow’s latest decision to switch to its national currency for gas payments was taken to guarantee Russia’s ability to trade and to ensure that its producers receive their money despite Western sanctions related to Ukraine.
“Amid this growing distrust of reserve currencies [US dollar and euro]the president put forward the idea of the need to cover the risks so that [Western states] wouldn’t try to rob us again. And so we introduced this [mechanism] payments in rubles… for the most important products. In this case, we are talking about natural gas,”, explained Peskov. He noted that the decision was not intended to “punch someone in the nose.”
“We do not want to complicate the lives of our customers. Russia has always been a reliable supplier. Russia values its reputation as a reliable supplier. Of course, we won’t do anything to damage this reputation.“, he underlined.
However, Russia cannot afford to compromise its need to receive payments for its exports, which is why the new payment mechanism aims to “to prevent [payments in] dollars and euros to be removed due to sanctions.“As part of the Ukraine-related sanctions packages, the US and most EU countries have frozen Russia’s foreign assets, while the country has also been cut off from the messaging system and SWIFT interbank transfer. These actions compromised the euros and dollars, according to Moscow, and the switch to the ruble was deemed necessary.
“There is an erosion of confidence in the dollar and the euro in the world, many countries doubt their reliability and develop regulations in national currencies,the official said. Peskov also stressed that the changes to the payment mechanism would in no way impede the ability of Russian gas buyers to pay for the product.
“Everything will be fast, clear, understandable… These are new rules, you have to respect them. Even if, I repeat once again, de facto nothing will change for European companies… They will pay, as before, in euros, the same currency that is indicated in the contracts. But at the same time, the final payment will go to the seller – Gazprom – in rubles,”, explained Peskov. To break it down, Russia’s new gas payment mechanism requires buyers from “unfriendly” countries that have imposed sanctions on Moscow to open ruble accounts at an authorized Russian bank, Gazprombank. The buyers then transfer the gas payments to the bank, which it would sell in exchange for rubles, credit the buyers’ ruble account, and transfer the funds to the gas supplier.
Peskov called the new mechanism “prototype systemruble payments, adding that gas may soon no longer be the only Russian export that offers such payments.
“I have no doubt that in the future this will also apply to new groups of goods. And [this mechanism] will take more and more place in our external trade relations,said Peskov.
Noting that European businesses will have no trouble opening ruble accounts, he said Moscow is “rely on the common sense of those who buy our gasbecause Russia would not be able to supply the product if the new payment mechanism was not respected.
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