Putin to de-dollarise trade with ally Turkey, Erdogan to switch to Mir payment system
Our agreement on natural gas supplies of Russian origin to Turkey with the payment of 25% of these supplies in Russian rubles will start working,” Putin said.
Russia’s president Vladimir Putin on Friday announced that the Russian gas supplies to its ally Turkey will not be paid in USD but partly in Moscow’s own currency rubles and the rest in Turkish lira. During a meeting with his Turkish counterpart, Recep Tayyip Erdogan, on Friday, President Putin noted that the decision to de-dollarize the trade between Ankara and Moscow was reached on the sidelines of the Shanghai Cooperation Organization (SCO) Summit in Samarkand, Uzbekistan. Erdogan also reportedly asked Putin for a 25% discount on gas supplies.
“We are ready to significantly increase supplies to Turkey in all directions that are of interest [to the country]. Our agreement on natural gas supplies of Russian origin to Turkey with the payment of 25% of these supplies in Russian rubles will start working in the nearest future,” the Russian president stated.
Separately, Turkish President Erdogan told the state press in his country that his government will extend the use of Russia’s Mir payment system as opposed to SWIFT in a new arrangement that was agreed upon after the four-hour confab in the North Caucasus. Ruble payments would enable Russia to avoid dollar payments and restrictions placed on trade due to the US-led European sanctions. Erdogan told reporters in Ankara that there’s a new “road map” agreed by the two nations to enhance bilateral trade that will also serve as a “source of power between Turkey and Russia in financial terms.”
Iran, Russia’s other ally, also de-dollarizes economy
Earlier Russia announced that its regional ally Iran also plans to de-dollarize its economy to do away with the repercussions of the United States imposed sanctions. Kremlin’s press secretary and spokesperson for the President of the Russian Federation Dmitry Peskov announced in a statement that both Tehran and Moscow will gradually move away from the use of the dollar and instead use the mechanism to trade in their own domestic currency.
Iran “will move away from the practice of using dollar” and switch to SPFS, Moscow’s domestic ‘System for Transfer of Financial Messages’ equivalent of the SWIFT financial transfer system designed by the Central Bank of Russia to make transactions in own currency, Peskov stressed.
Tehran had, for abundantly long, expressed willingness to switch trade and commerce transactions made abroad in trade with Russia to its own national currency Iranian rial. Iranian President Ebrahim Raisi, an adversary of the United States, was the first among the world leaders to reach out to President Putin condemning what he described as hideous unilateral sanctions imposed by the West to destroy Russia’s economy. Iran was banned from SWIFT in 2012 by the West on grounds of violations of the 2015 JCPOA deal and expanding its ambitious nuclear programme.
