Russia only accepts rubles for gas supplies
In order to defend itself against the harsh sanctions, Russia has decided to take a drastic step: the country’s energy supplies can only be paid for in rubles.
In the future, customers in Germany and other EU countries will have to pay in rubles for gas deliveries from Russia. Russian President Vladimir Putin on Wednesday instructed the government to stop accepting payments in dollars or euros. Deliveries would continue to be fully guaranteed, the Kremlin chief assured in a government video conference that was broadcast on state television.
The “unfriendly states” that Russia has blacklisted are affected. This includes Germany and all other EU countries, but also the USA, Canada and Great Britain. The announcement promptly strengthened the Russian currency, which is under massive pressure. The central bank and the Russian government now have a week to determine the modalities for switching from foreign exchange payments to ruble payments, Putin said.
As a reaction to the sanctions imposed by the West, the Russian government had already decided at the beginning of the month that its own financial obligations to “unfriendly states” would only be settled in rubles. These include Ukraine, Switzerland and Japan.
Ruble gained value after the announcement
The Russian government approved the list of “unfriendly” countries to Russia on March 7.
The approved list includes countries such as the USA, European Union countries, the United Kingdom, South Korea, Japan, Ukraine, Switzerland and Singapore, as well as 15 other countries that impose sanctions on Russia.
After Putin’s statements, the dollar/ruble parity declined by nearly 3 percent and fell below 100 for the first time since March 3.
According to Russian President Vladimir Putin, the country will in future only accept the ruble as a means of payment for gas deliveries to so-called “unfriendly states”.
In the future, customers in Germany and other EU countries will have to pay in rubles for gas deliveries from Russia. Russian President Vladimir Putin on Wednesday instructed the government to stop accepting payments in dollars or euros. Deliveries would continue to be fully guaranteed, the Kremlin chief assured in a government video conference that was broadcast on state television. Payment for Russian goods in foreign currency has lost its meaning.
The “unfriendly states” blacklisted by Russia are affected. This includes Germany and all other EU countries, but also the USA, Canada and Great Britain. The announcement promptly strengthened the Russian currency, which is under massive pressure.
Gas prices rise again in Europe
The megawatt hour price of natural gas, which started from 97 euros in Europe, increased by 22.42 percent to 118.75 euros.
The developments regarding the Russia-Ukraine war continue to be the main agenda item in the markets.
The gas contract price for April, traded at TTF, the Netherlands-based virtual natural gas trading point with the deepest depth in Europe, opened at 97 euros per megawatt-hour today and fell below the 100 euro level.
Prices increased by 22.42 percent compared to the opening at 15:54, Turkey time, and reached 118.75 euros per megawatt-hour.
New Ruble Plan from Putin
The statements of German Chancellor Olaf Scholz and Russian President Vladimir Putin were effective in the price increase.
Scholz said that Western sanctions against Russia are starting to show their effects and that they may soon take even stricter measures if Russian President Vladimir Putin does not end the country’s aggressive stance.
“We plan to switch to Russian rubles for payments for natural gas sales to unfriendly countries,” Putin said.
