Russia Expands the Use of National Currencies for Energy Settlements

Russia Expands the Use of National Currencies for Energy Settlements

Russian Deputy Prime Minister Alexander Novak has announced that Russia will expand the use of national currencies for its energy trade settlements and move away from the US dollar. Novak said there is a great interest in acquiring Russian energy resources, enabling Russia to accept the currencies of other nations for settlements.

Russia to Drop the US Dollar from Energy Trade Settlements

Russia is likely to drop the US dollar and focus on using national currencies, such as the Chinese yuan and the Russian ruble, for energy trade settlements. Russian Deputy Prime Minister Alexander Novak stated that the trend of adopting national currencies has accelerated due to the sanctions imposed by Western nations as a consequence of the Russia-Ukraine conflict.

In a television interview, Novak stated:

"The trend has changed to less use of dollars or euros. Given the current problems in settlements with these currencies, we are moving only to national currencies the yuan is in demand here, and the ruble is in demand."

Novak clarified that China was already making payments for gas and oil in Chinese yuan and Russian rubles. Novak also explained that the country was open to receiving other currencies in a similar form of settlement.

Russia Moves to Abandon the Dollar in the Future

The new measures would allow other countries to access the Russian energy market by paying with currencies other than the US dollar and the euro. Novak said that despite sanctions, there was great interest from other countries in acquiring energy resources and settling transactions in national currencies.

The Russian government is looking at abandoning the dollar and the euro in the future. However, a report issued recently by analysts at the Bank of Russia indicates this change is "hardly possible" without making structural changes to foreign trade.

Nonetheless, Russia is currently advancing in the establishment of several trade agreements with countries like India and Iran to create payment systems that facilitate alternate settlement options.

BRICS, the G7 alternative bloc comprised of Brazil, Russia, India, China, and South Africa, is also preparing to discuss a bloc currency at the next BRICS leaders’ summit to be held in South Africa next August.

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