The Kremlin warns the West: the ruble against gas system is the “prototype”
President Vladimir Putin’s ruble payment scheme for natural gas is the prototype the world’s largest country will expand to other major exports because the West sealed the drop in the US dollar by freezing Russian assets, a said the Kremlin. The Russian economy is facing the most serious crisis since the collapse of the Soviet Union in 1991 after the United States and its allies imposed crippling sanctions due to Putin’s invasion of Ukraine on February 24.
Putin’s main economic response so far has been a March 23 order for Russian gas exports to be paid for in rubles, but the system allows buyers to pay in the contract currency which is then exchanged into rubles by Gazprombank. “This is the prototype of the system,” Kremlin spokesman Dmitry Peskov told Russian state television Channel One about the ruble for the gas payment system.
“I have no doubt that it will be extended to new commodity groups,” Peskov said. He gave no time frame for such a move. Peskov said the West’s decision to freeze $300 billion in central bank reserves was a “theft” that would have already accelerated the move away from reliance on the US dollar and euro as global reserve currencies .
The Kremlin, he said, wanted a new system to replace the outlines of the Bretton Woods financial architecture established by the Western powers in 1944. new system – different from the Bretton Woods system,” Peskov said.
Western sanctions against Russia, he said, had “accelerated the erosion of confidence in the dollar and the euro”. Putin said the “special military operation” in Ukraine was necessary because the United States was using Ukraine to threaten Russia and Moscow had to defend itself against Ukraine’s persecution of Russian speakers.
Ukraine has dismissed Putin’s persecution claims and says it is waging an unprovoked war of aggression. Russian officials have repeatedly said that the West’s attempt to isolate one of the world’s largest producers of natural resources is an irrational act that will drive up prices for consumers and tip Europe and the United States in recession.
Russia has long sought to reduce its dependence on the US currency, although its main exports – oil, gas and metals – are denominated in dollars in world markets. Globally, the dollar is by far the most traded currency, followed by the euro, the yen and the pound sterling.
(This story has not been edited by the Devdiscourse team and is auto-generated from a syndicated feed.)