Russia, the world’s largest wheat exporter will be demanding rubles for wheat from here on out. Ever since the war in Ukraine, where Russia is seen as the aggressor by most parts of the western region, there have been a lot of sanctions that have been placed on Russia.
Prohibiting them from the western financial market which is basically the epicenter of the financial system at the moment.
These sanctions have now allowed Russia to think more differently and trade more in its local currency. This was inevitable given the fact that they could not trade in the major world currencies due to sanctions.
Earlier this year, we have seen Vladimir Putin, who is the current president of Russia announced that be demanding rubles for Gas and other commodities which they have in large amounts.
How the West will react to this play from Russia is currently unknown. This week they came up with new lines of sanctions and a system to try and make a cap on the price of Russian oil at the G7 summit in Germany.
This might sound good on paper but is not practical, all countries have to be able to abide by this rule such as major Russian oil importers such as China and India.
It would complicate the already complex global market and probably drive prices higher. It will be an interesting to see how this develops over the coming months and will it be enough to slow down the Russian economy who is enjoying an extraordinary trade surplus at the money.
