MOSCOW – A recent report by the Central Bank of Russia indicated that the ruble and the euro are increasingly gaining ground in currency exchange with major trading partners.
With more than 3 billion rubles, China continues to lead the use of the Russian currency, the ruble, in trade with Russia in absolute terms. This corresponds to an increase from 7.5% to 8.5% of Russia’s payments to China and from 4.3% to 4.4% from China to Russia.
Both countries have so far preferred the European currency.
In the first quarter of 2018, the Chinese paid 87.7% of Russian goods and services in dollars and only 0.7% in euros, while in the second quarter of 2019 the proportion went to 38.8% and 46.4% respectively.
It is estimated that India is free of the dollar in its trade with Russia, still faster than all other countries. In 2018, the ruble accounted for 38% of trade payments between Moscow and New Delhi, but already in the first six months of 2019 this figure rose to 76.5%. The dollar fell from 76.7% to 17.4%.
Because of this, Indian dollar-paying banks risk falling under US sanctions under America’s Sanctioning Adversary Containment Act (CAATSA).
Decolourization in progress
In the last two years, Turkey has not only paid Russia more often in rubles, but has been much more willing to accept the Russian currency as payment for its own exports. In the second quarter of 2019, Ankara paid in rubles 15.5% of imports from Russia, compared to 10.3% in the previous year. At the same time, Moscow pays 36.2% of imports from the Ottoman country in rubles.
According to statistics from the Russian Federal Customs Service, in the first eight months of 2019 mutual trade reached $17.6 billion, which is 2.3% more than in the same period of 2018.
Meanwhile, an intergovernmental agreement providing for further integration of the Russian and Turkish banking systems was signed in September.
Most trade between Russia and the European Union is in the energy sector.
“This currency [euro] is already used in most export contracts,” said Russian President Novatek, Leonid Mikhelson, announcing that the euro will be the main operating currency with European customers.
Rosneft director Igor Sechin announced that the company has completed the transfer to the euro on export contracts “to minimize the risk of possible new US sanctions.”
“[Russian oil company] Rosneft sees great potential for working with the euro,” Sechin said, adding that “in the future, the Chinese yuan could become a much more important global currency than the dollar because of economic growth from China.”