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24 Dec, 2018 11:26

Russia phasing out US dollar in military contracts in favor of local currencies – trade minister

Russia phasing out US dollar in military contracts in favor of local currencies – trade minister

Moscow is dropping the greenback in major arms deals and switching to the Russian ruble and the national currencies of its partners, according to the country’s trade minister Denis Manturov.

The minister added that the euro is currently the alternative to the dollar, with US currency used only when there’s no other way.

“We are using various schemes, including settlements in rubles,” Manturov said in an interview with Russian daily RBC. “National currencies of our partners are used along with rubles purchased on the stock exchange.”

The minister stressed that all contracts on delivery of the S-400 air defense missile systems are clinched either in rubles or in local currencies of the buyer countries. So far, supply contracts on the air defense systems have been signed with India, Turkey and China.

Indian authorities agreed on supplies of S-400 systems at the beginning of October. The deal worth $5.4 billion was clinched during Russian President Vladimir Putin's two-day visit to New Delhi. India was also planning to purchase Russian T-14 Armata tanks and guided-missile frigates. The country is also planning to develop submarines and next-generation fighter jets in cooperation with Russia.

In December 2017, Turkey and Russia clinched a deal worth $2.5 billion on the purchasing of two Russian-made S-400s. China was the first foreign nation to purchase S-400 systems. Beijing signed the deal on supplies of up to eight units of the S-400 equipment as early as in 2014. The contract value was estimated at around $3 billion. In September, the US State Department imposed sanctions on the Chinese military for buying Russian military hardware.

The S-400 is a long-range air defense system designed to protect strategically important sites like key infrastructure objects, military units or ballistic missile launch silos against enemy aircraft and missiles. The system is capable of destroying multiple aerial targets at an extremely long range of up to 400 kilometers (nearly 250 miles).

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