Putin sticks to his word by issuing a decree to “unfriendly” countries that they should start finding ways to pay for Russian gas in rubles. Over the last couple of weeks, rumors were swirling around that Russia was planning to use this tactic as a countermeasure to the sanctions they have faced from the west. It all turns out that Moscow wasn’t bluffing.
Vladimir Putin on Thursday said Russia was establishing “a clear and transparent scheme” for these foreign customers. “If such payments are not made, we will consider this a default on the part of the buyers — with all the ensuing consequences,” he added during a speech at the Kremlin.
Thus far this move is only targeting buyers in 48 countries, including those from the EU. The requirements are such that, each country will be required to open a bank account in foreign currency and in rubles at Gazprombank in Russia.
Russia is mainly targeting countries that they have deemed to be unfriendly towards Russia in imposing sanctions on the country in light of the invasion.
Putin gave the central bank, the customs authorities, and the government 10 days to implement the new system. Because most April deliveries-related payments are not expected until early or mid-May, the decree will effectively be tested next month
Europe is in an uproar over the move but it’s a move that seems logical. It’s impossible for Russia to work with countries given the financial sanctions that have been imposed on them by the west. By settling the payment of gas in their local currency, it will prop up the ruble.
Let’s see how this plays out as we are in the beginning stages of this economical war.
