Russia has developed alternative electronic transfers to bypass Western restrictions.
`Mir’ provides an alternative to Visa and MasterCard, which have stopped providing international transaction services to Russian clients
Sanctions have also targeted Russia’s holdings in Euros and US dollars to deny the country the ability to trade internationally. However, according to the report, Moscow is setting up trade mechanisms to enable national currency payments with foreign trade partners.
“Russia and China have had ruble-yuan payment mechanisms for a while, and earlier this month, Turkey expressed its willingness to trade in rubles. Also, a ruble-rupee trading scheme has been announced for Russian oil exports to India. India, which until now bought only 3% of its oil imports from Russia, has been eager to boost purchases, as has Serbia. It is a sign that Russia has alternatives for exports if the West continues to isolate the country.”
To support the ruble, which has suffered a sharp decline against major currencies this month, RT said that Russian businesses that trade abroad have been ordered to sell 80 percent of their foreign currency earnings and convert them to rubles.
“It is expected to stabilize the national currency and encourage more investments in Russia instead of moving them abroad,” the report stated.
The report said that Russia has temporarily banned grain exports to the countries of the Eurasian Economic Union (EAEU) this week. “Restrictions cover shipments to post-Soviet states that share a free customs zone with Russia. They include Armenia, Belarus, Kazakhstan, and Kyrgyzstan. The measure aims to keep the domestic food market well stocked and prices from soaring.”
According to RT, with nearly half of the country’s forex reserves frozen and unavailable to support the depreciating ruble, the Russian Central Bank urgently raised the key rate late in February from 9.5 to a record 20% per annum.
“The step was taken to compensate for the increased devaluation and inflation risks, or simply to help maintain price stability and protect citizens’ savings from depreciation.”
It said that the regulator also launched additional measures to support credit institutions and recommended that banks not charge interest and penalties on loans, as well as allowing the restructuring of payments and repayment holidays.
“The moves have helped to stabilize the ruble, which has recorded six consecutive days of gains against the euro and the dollar, as of Thursday,” it said.
Russia has authorized two payments to bondholders totaling $117 million, the report stated. The money comes from the country’s accounts frozen abroad.
“It is now up to the US and its allies to approve the transfer. If they do not, the Russian government has ordered that the debt be paid in rubles at the official central bank exchange rate at the time of transfer,” it added.