Vladimir Putin announced on Wednesday that Russia would no longer accept payments in dollars or euros for gas supplies to the EU, giving Russian officials a week to develop a new system in rubles.
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“I have decided to implement some measures to pay for our gas supplied to the enemy countries in rubles and to abandon the compromised currency in all terms,” the Russian president said during a government meeting. Explains that it is a reaction to the freezing of Russian assets in the West due to its invasion of Ukraine.
Mr Putin called on the central bank and the government to set up a new body, “clear, transparent” and “take over the ruble in the Russian currency market” within a week.
The announcement had an immediate effect on the Russian currency, which strengthened against the euro and the dollar, while it collapsed on February 24 and Russian forces entered Ukraine.
He also pointed out that other Russian exports would be affected as Russian Foreign Minister Sergei Lavrov froze $ 300 billion worth of Russian Foreign Minister Sergei Lavrov’s so-called “theft” operation on Wednesday.
“It is clear that we no longer understand the EU supplying our goods to the United States and receiving dollars, euros and other currencies,” Putin said.
For now, Russian hydrocarbons are largely exempt from the harsh Western sanctions against Russia.
Admittedly, Washington has imposed a ban on Russian gas and oil. But the latter continues to flow into Europe, relying heavily on Russian hydrocarbons and Moscow’s first market.
But the EU is now considering a ban on Russian oil.
Many decisive international summits are expected to recommend new Western sanctions.
Moscow, for its part, has been advocating for years the devaluation of its economy in order to mitigate its impact on sanctions.
In March 2019, the Russian public gas company Gazprom announced the sale of its first gas ruble to a European company.
“Without Russia’s hydrocarbons, it’s absolutely clear that the gas and oil markets will collapse if sanctions are imposed.