Russian companies trying ruble-based payment schemes

Russian companies trying ruble-based payment schemes Photo: Alexey Kudenko / RIA Novosti

Norilsk Nickel and Alrosa, Russia's major mining companies, are considering the possibility of settling payments with their foreign customers in rubles. According to the Kremlin, Russia also favours bilateral trade with all countries in their national currencies instead of the dollar, although the idea is still far from being implemented.

Two of Russia's biggest mining companies announced investigating ruble-based payments schemes last week, reports Reuters. The engagement of the national currency is aimed at reducing the role of the US dollar in Russian trade in order to limit the impact of American sanctions. Russia has already faced several rounds of US sanctions, but the measures announced in the middle of August made the ruble fall to its weakest in the past two years. Earlier, national aluminium and hydropower giant En+ Group, which was hit hard by the sanctions, had to switch most of its dollar payments and loans into other currencies as a preemptive measure.

According to Reuters, the world's leading producer of nickel and palladium Norilsk Nickel is currently discussing the possibility of settling payments in rubles with foreign customers that are interested in such an arrangement, while the world's top producer of rough diamonds Alrosa is testing a mechanism to settle ruble-based payments. ''By way of an experiment, such deals were completed with clients in China and India,'' the diamond producer said in a statement, adding that the company was ready to implement this payment scheme in future.

Russian diamond producer Alrosa is ready to implement ruble-based payments in future. Photo: wikipedia.org

It was the Shanghai branch of Russia's VTB bank that facilitated Alrosa's first ruble-based deal with an unnamed Chinese customer. ''The ability to pay in rubles contributes to increasing the share of payments settled using national currencies in overall Russia-China trade,'' the bank's First Deputy President Yuri Soloviev commented.

In May, President Vladimir Putin pointed out in a speech that ''the monopoly of the US dollar is not reliable enough, it is dangerous for many''. The president also proposed to diversify the country's international reserves to reduce reliance on the American currency. The country's Central Bank has already significantly decreased its dollar reserves buying gold instead. The regulator also considered investing into International Monetary Fund bonds and Chinese bonds. Besides, the Moscow Exchange announced launching more currency pairs in July, including trading the ruble against sterling, the Chinese yuan and the Turkish lira, thus facilitating trade in national currencies.

By Anna Litvina