MOSCOW (Realist English). The idea proposed by the President of the Russian Federation to trade energy carriers in rubles has long been overdue and the authorities were looking for the most appropriate moment to announce it. This was stated by Pavel Zyukov, head of the tax practice of the Coleman Legal Services law firm, in an interview with the Realist News Agency.
“Since the circle of countries that Russia wants to oblige to pay for energy in rubles is currently limited, thus the Russian authorities will be able to test the ground in a test mode and subsequently decide to expand trade in the national currency. This is explained by several reasons.
First, currently, the sale of natural gas for rubles will essentially constitute a voluntary sale by foreign states of their currency in order to purchase rubles on the Russian domestic market for subsequent payment with them for the Russian gas, which will certainly entail a strengthening of the ruble in the short term.
Thus, the mere statement of the President of the Russian Federation about the upcoming plans for energy trading for rubles led to a significant strengthening of the Russian ruble against the US dollar and the Euro.
Second, the transfer of payments for energy carriers into rubles will significantly reduce the risks of freezing, blocking and withdrawal of funds received from their sale in foreign currency.
And, third, the implementation of this idea in the foreseeable future may strengthen the trend towards the internationalization of the ruble and global de-dollarization. It should be noted that this course on internationalization of the national currency has already been adopted by China, India, Saudi Arabia and Iran, who also do not want to see the US dollar as the main reserve currency of the world in the future.” Zyukov explained in an interview with the Realist Information Agency.
On March 31, Russian President Vladimir Putin signed a decree on the transfer of payments for gas with unfriendly countries into rubles. According to the head of state, “the existing gas supply contracts will be stopped if buyers from unfriendly countries do not fulfill the new payment terms.” Buyers of Russian gas will need to open ruble accounts in Russian banks to pay for supplies from April 1.
