Russia's decision to switch to receiving payments for energy exports in rubles is a daring move that could transform the global energy payment framework, Porinju Veliyath, an Indian financial expert and the head of Equity Intelligence Investing, told Sputnik
NEW DELHI (Pakistan Point News / Sputnik - 06th April, 2022) Russia's decision to switch to receiving payments for energy exports in rubles is a daring move that could transform the global energy payment framework, Porinju Veliyath, an Indian financial expert and the head of Equity Intelligence Investing, told Sputnik.
Last week, Russian President Vladimir Putin signed a decree which stipulates that all contracts for pipeline gas deliveries with companies registered in countries that have sanctioned Russia must be settled in rubles.
"The supremacy of West started to decline, no doubt about that. By insisting on ruble for oil payments, Russia has taken a bold stance against the prevailing norms/practices - this could go long way in the transformation. Now, if Russia emerges strong from the sanctions it would be new precedent," Veliyath said, adding that "more and more bilateral arrangements bypassing the petrodollar system can be expected."
The expert also touched on the subject of trading in national currencies, saying that the efforts of Moscow and New Delhi to expand the practice of using national currencies in mutual settlements will prove beneficial to both sides.
"It is a win-win arrangement for both Russia and India. India is an energy-starved nation and Russia is an energy rich, struggling to find new buyers post sanctions," Veliyath explained.
He also suggested that a trilateral arrangement with China could significantly increase trilateral trade between the countries and lead to the creation of the strongest economic bloc in the world.
"But for this to happen, Russia should play a more active role in building mutual trust and confidence between China and India," Veliyath noted.
Russia and India are currently working on an alternative transaction platform intended as a replacement for SWIFT. Russian Foreign Minister Sergey Lavrov said on April 1 that he expects the two countries to progressively expand the use of rubles and rupees in trade and financial affairs.
