India mulls Rupee payments for trade with Russia: Report


Russian Finance Minister Anton Siluanov has denied reports that Moscow cannot fulfil its obligations under the public debt…reports Asian Lite News

India is planning to set up a mechanism to facilitate trade with Russia using local currencies, with a decision expected as early as next week, media reported.

People familiar with the matter told NDTV that the government was discussing how trade could be settled in rubles and rupees as Indian exporters are awaiting payments of about $500 million that have been stuck after the sanctions on Russian banks.

The central bank as well as commercial lenders including State Bank of India and UCO Bank Ltd. are being consulted, they said.


Latest data show India’s bilateral trade with Russia stood at $10.8 billion, accounting for less than 1.5% of the South Asian nation’s total, the NDTV reported.

International sanctions and financial restrictions on Russia after its invasion of Ukraine are disrupting supply chains and driving up commodities prices, which add to the inflation problems of developing economies such as India.

Under the proposed mechanism, ruble could be deposited into an Indian bank after converting it into rupee and vice versa. There are some concerns, however, on how to peg the currencies, and also on ways to balance the trade as India is a net importer of Russian goods, which include defense equipment, it was reported.

We have enough funds: Russia

Russian Finance Minister Anton Siluanov has denied reports that Moscow cannot fulfil its obligations under the public debt.

“Statements that Russia cannot fulfil its obligations under the public debt do not correspond to reality. We have the necessary amount of funds to service our obligations,” the Ministry’s press service quoted the Minister as saying.

Russia is also ready to make payments in rubles at the exchange rate of the Bank of Russia on the date of payment, he noted.

“Moreover, for issues of Eurobonds issued since 2018, such an opportunity was laid down directly in the issuance documents,” Siluanov recalled referring to payment in ruble.

Russian Finance Minister Anton Siluanov  (IANS)

The Ministry of Finance will additionally inform about the fulfilment of their obligations by agent banks under the terms of Eurobond issues.

Earlier in the day, Siluanov told local media that nearly half of the country’s roughly $640 billion of gold and foreign currency reserves have been frozen in the wake of Moscow’s ongoing war on Ukraine.

The Russian authorities will closely monitor inflation and the state of the country’s pensions, Siluanov noted.

“Of course, we have enough money to ensure the production of vital goods. The Central Bank will provide the necessary liquidity to the financial system,” he said.

Since Russia started the war on February 24, there has been an onslaught of Western economic sanctions, including asset freezes, in response.

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