Russia now requires "unfriendly countries" to purchase in rubles
President Vladimir Putin says trading in dollars and euros "makes no sense whatsoever"
Russian President Vladimir Putin declared Wednesday that “unfriendly countries” will have to purchase Russian exports in rubles. Putin stated that his decision was based on western sanctions. He views the sanctions as a western failure to honor obligations to Russia.
“It is absolutely clear, though, that given the circumstances, it makes no sense for us to supply our goods to the European Union or the United States and be paid in dollars, euros or certain other currencies,” Putin stated in a meeting with government ministers.
EU gas and oil prices rose following President Putin’s statements. Gas prices rose up to 30% in some regions and oil prices increased 5%. Russian natural gas accounts for 45% of the EU’s imports.
President Putin said that this change would not negate Russia’s current gas contracts.
“I would like to note that Russia will continue to supply natural gas in the agreed to volumes and for the agreed-on prices as indicated in the existing contracts. Unlike some of our colleagues, we value our business reputation as a reliable partner and supplier.”
Russia plans on amending the existing contracts to change the transaction currency to the ruble. Some economists have speculated this may be a strategy to sustain the ruble and Russian economy.
German, Polish, and Dutch spokespeople have stated they would view Russia’s plan as a breach of payment rules in their current contracts. These nations are unlikely to comply with the change of currency.