Russia’s economy is facing its worst crisis since the collapse of the Soviet Union in 1991, after the United States and its allies imposed crippling sanctions on Putin’s February 24 invasion of Ukraine.
Putin’s main economic response so far has been a March 23 order for Russian gas exports to be paid in rubles, but the scheme allows buyers to pay in the contracted currency, which is then exchanged in rubles by Gazprombank.
“It’s a prototype of the system,” Kremlin spokesman Dmitry Peskov told Russian state television channel Channel One about the ruble payment system for gas.
“I have no doubt that it will be extended to new groups of goods,” Peskov said.
He did not give a time limit for such a move.
Peskov said the West’s decision to freeze $ 300 billion in central bank reserves was a “robbery” that would have already accelerated the reduction of dependence on the US dollar and the euro as global reserve currencies.
The Kremlin, he said, wanted a new system to replace the outlines of Bretton Woods’ financial architecture, established by Western powers in 1944.
“It is clear that – even if this is a distant prospect today – we will come to a new system – different from the Bretton Woods system,” Peskov said.
Western sanctions against Russia, he said, “accelerated the erosion of confidence in the dollar and the euro.”
Putin said the “special military operation” in Ukraine was necessary because the United States was using Ukraine to threaten Russia, and Moscow had to defend itself against Ukraine’s persecution of Russian-speakers.
Ukraine has rejected Putin’s accusation of persecution and says he is waging an unprovoked war of aggression.
Russian officials have repeatedly said that the West’s attempt to isolate one of the world’s largest producers of natural resources is an irrational act that will drive up consumer prices and lead Europe and the United States into recession.
Russia has long sought to reduce its dependence on the US currency, although its main exports – oil, gas and metals – are priced in dollars on global markets. Globally, the dollar is by far the most traded currency, followed by the euro, yen and pound sterling.
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