Russian First Deputy Prime Minister Andrei Belousov said on Thursday that the ruble rate is “too strong” now and that the rate of 70-80 rubles to the dollar would be more balanced. In an interview with the Russian News Agency CASSBelousov said the Russian currency is strong given deflation and high interest rates.
“The ruble is too strong with us. 55-60 rubles per dollar is an excessively strong rate. Especially in the midst of deflation and high interest rates,” the official said.
“The rate of 70-80 rubles per dollar is the balanced rate, comfortable for our industry,” added Andrei Belousov.
Belousov also told the news agency that Russia’s year-on-year inflation by the end of the year will be around 15%, and as of June 10 it was 16, 69%. The Russian First Deputy Prime Minister’s remarks that the ruble is “too strong” came against the backdrop of Finance Ministry sources revealing that talks are underway between Moscow and New Delhi to use the existing Rupee-Ruble mechanism to increase imports of cheap oil. It was also reported that negotiations were underway to procure cheaper oil from Russia.
Russian-Indian negotiations underway for the rupee-ruble system
It is relevant to mention here that since Russian President Vladimir Putin announced the “special” military operation in Ukraine, his regime has been completely cut off from crucial international money markets and the West has imposed sanctions on Moscow. Therefore, Putin’s government decided to switch to local currency payments to speed up bilateral trade.
India, which buys 18% of its crude oil exports from Russia, has studied the rupee-ruble system extensively as a contingency plan to do business with its major partner while avoiding government-imposed burdens. West and US dollar trade. The Reserve Bank of India (RBI) reportedly met with leaders of three Russian financial institutions, including VTB, Sberbank and Gazprombank, in March to discuss the future Rupee-Ruble deal, indicating significant progress. It is to be mentioned here that the Rupee-Ruble arrangement was set up in 1953 as part of the Indo-Soviet agreement as an alternative for collecting dues.
Amid the Russian-Ukrainian war, as the West calls on the international community to impose sanctions on Moscow and abandon its energy exports, senior Indian officials have repeatedly indicated that New Delhi must protect its own interests . India has pledged to continue buying oil from Russia if offered at the appropriate price. Union Oil Minister Hardeep Singh Puri added: “We have energy relations with Russia, we buy crude from them but our total imports do not exceed 0.2%, we are open to buying if the conditions are right, we must look after our interests.
More recently, External Affairs Minister Dr S Jaishankar lambasted the West by saying that Europe should not think of its problems as ‘world problems’. Speaking at GLOBESEC 2022 and responding to a question about India’s position in the Russian-Ukrainian war, Jaishankar said: “Europe must get out of the idea that Europe’s problems are Europe’s problems. of the world, but that the problems of the world are not the problems of Europe”.