Russia to abandon USD and euro use in energy transactions

Russia will abandon USD and euro use in energy transactions

  • Russia will abandon USD and euro use in energy transactions
  • The stamina of the Russian economy before the punitive attacks
  • A chain of fried chicken to replace KFC

(Alles Europa News English ) – Earlier this year, the Russian Ministry of Finance said Yuan “is increasingly important” with the country’s national investment fund.

The maximum percentage of yuan they can hold has been doubled, to 60%, from December last year.

In related developments, on April 17, The ECB issued a warning, that the US and eurozone should not take the international position of the euro, USD for granted, when Russia and China want to create their own mechanisms, Find alternative coins in payment.

Moksva said it would completely eliminate the use of USD and euro in energy transactions, to switch to the use of the respective national local currencies.

This information was said by Russian Deputy Prime Minister Alexander Novak in a TV channel interview Russia-1 TV on April 22.

According to Alexander Novak, most energy transactions with foreign partners are made of rubles and yuan.

Here, Moscow will completely eliminate USD and euro from these transactions.

The move is part of Russia’s plan to respond to Western sanctions imposed on the country due to the Russia-Ukraine conflict.

Currently, many Russian banks have been disconnected from the international interbank payment system (SWIFT) and cannot make many transactions.

The Russian deputy prime minister said well, their partners in China paid gas, oil in the yuan and ruble.

“In the current context, payment mechanisms can only be conducted through the use of local currency,” he said when answering Russia-1 TV.

He also pledged that Moscow will improve its mutual payment system, in order to meet the strong needs of countries with Russian energy.

Last year, Russia’s euro and USD payment rates in transactions with foreign partners plummeted, from 79% earlier this year to 50% at the end of the year.

Meanwhile, the yuan share for Russian currency transactions increased by more than 30% last year, according to the Russian Central Bank.

*The stamina of the Russian economy before the punitive attacks

Last year, social spending increased from 6,000 billion rubles to 7,000 billion rubles (4.5% of GDP). The pension fund recently changed its name to Social Fund, giving more cash to retirees, mothers, people with disabilities, regional governments. All explain why fighting does not affect the standard of living Russians.

The average salary in medium and large companies increased slightly even after taking into account inflation. Overall, the Russian economy has proven resilient.

Real GDP fell by only 2-3% last year – much less than the 10-15% decline that many economists had predicted.

Goldman Sachs calculated that Russia had escaped the recession a year ago. Most forecasters believe the economy will grow this year.

All this shows that Putin is financially capable to continue to maintain the war. But to push the pace is another matter.

Russia once accepted the total war, spending up to 60% of GDP on the military between 1942-1943. However, although the economy is more concentrated, it is not a planned Soviet command and control apparatus.

If spending increases on the war, the Kremlin is difficult to maintain economic stability and living standards.

The first problem is raising money quickly. Not all state assets are liquid. Printing money will boost inflation, erode living standards. Increasing public debt or taxes is also a risk option.

That is not to mention the bottlenecks on the supply of talent. Supporting Russia too deep in China or the Gulf of China will make the West more discontent.

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