This is confirmed by the failure of movements to save the ruble in Russia. They forced companies to sell 80 percent of their export profits for rubles, blocked the withdrawal of more than 10,000 dollars or euros from individuals’ deposits and “banned” the payment of foreign currency debts. The latter was impossible in advance – if an institution tries to pay a debt with an asset other than the contracted one, it becomes, in effect, insolvent. That is why the state itself paid two tranches of maturing bonds totaling more than $4 billion. The same applies to Russian companies that continue to pay their debt in dollars.
For this reason, Russia has resorted in recent days to its next tool of geopolitical influence – the export of raw materials. Zavalny is not alone in pushing for alternative currencies in payments. Putin announced that gas exports to “enemy countries” (including almost everyone in Europe) will begin to be made against the ruble only. At least in words, by the end of March 2022, Gazprom and the Central Bank of Russia had to develop a mechanism to make this happen. Reluctant to use its currency, the federation has threatened to divert commodity exports such as gas to Asia.
First, over the past year and a half, Russia’s gas exports have surpassed those of its oil exports. Paradoxically, after the invasion of Ukraine, Europe increased its imports of Russian gas . Currently, the export of raw materials is the main currency for Russia.
Therefore, it is highly unlikely that she will try to interrupt him. We write “experience”, but in fact such an action is impossible. Gazprom’s contracts with buyers in Europe are in euros, and if the company tries to change the terms unilaterally, it will mean breach of contract. This will lead to lawsuits and significant financial damage to the company. If it stops delivering, it will be even worse for Gazprom and Russia, because to the huge losses from unsold exports will be added penalties that the private institution will have to pay, amounting to hundreds of millions of euros per day.
In conclusion, it is not impossible that in the future Russia will start receiving gold or a currency other than Euro from gas exports. But this cannot happen without the consent of the counterparties with whom it trades. Such an agreement with most European countries at this stage is unrealistic. They are trying to end dependence on Russian imports (representing 40% of total gas supplies) rather than “playing by the Kremlin’s rules”.
Despite this impossibility, discussions about paying for Russian exports in rubles may have borne fruit. The ruble has appreciated more than 41% against the dollar since the low level reached in early March, when the rate was 140 rubles to the dollar.
Since 2014, when Crimea was annexed, Russia’s central bank has accumulated more than 3,000 tons of gold reserves. This made it one of the largest owners of the precious metal. In 2020, it halted its gold buying policy (which the sovereign wealth fund did not) before resuming it earlier this year. After a short window in which he did not participate in the markets, he returned as a buyer at the end of March, but at a fixed rate of 5 thousand rubles (about 52 dollars) per gram of pure gold. This is significantly lower than the spot price of $62.18 at the time of writing.